McDonald’s hopes innovation lifts its breakfast sales

The company is reportedly planning new Donut Sticks later this year in a bid to get back its breakfast steam.
Photograph courtesy of McDonald's Corp.

In October, McDonald’s executives promised more innovation at breakfast in a bid to regain traffic lost during the morning hours.

The company has since been working to fulfill that promise. On Thursday, Business Insider reported that the company is planning new Donut Sticks in a new, limited-time offer beginning in February.

The company would not confirm the report, promising only that there would be new product news later this year.

“Our customers have been lovin’ the quality and iconic taste of McDonald’s breakfast for decades,” the company said in a statement. “In recent years, All Day Breakfast, more McCafe choices and new breakfast tastes like our Triple Breakfast Stacks are all proof of our renewed breakfast commitment. Expect more delicious and craveable news to come in 2019.”

McDonald’s has been outperforming its competitors from a sales standpoint all year long, but traffic decreases remain a problem.

Breakfast has been a particular problem, giving company management a sudden, unexpected headache. In May, company executives said that breakfast was “the biggest challenge” in the first quarter. In October, executives said that “we’re still losing a little share.”

The daypart had traditionally been the company’s steadiest, an area where McDonald’s had a major advantage over its primary rivals, notably Burger King. Wendy’s has largely abandoned its efforts to establish breakfast.

But coffee chains like Dunkin’ and Starbucks Corp. have been working on adding more food products at breakfast, and McDonald’s also faces a tough new morning competitor in Taco Bell.

“It’s very competitive out there at breakfast,” CEO Steve Easterbrook said in October.

But there are concerns that all-day breakfast, added in 2015 and expanded a year later, has taken away from demand in the morning—raising concerns with franchisees, who spearheaded the creation of an independent, National Owners Association last year.

“Breakfast all day has done very little to help the overall business,” franchisee Blake Casper said at a meeting of operators in October.

McDonald’s has been working for months to generate traffic in the morning. The company brought back $1 coffee in September and has added breakfast value in various forms.

Executives also promised innovation and in November the company introduced Triple Breakfast Stacks. The item is on the menu in the mornings, but is available “on request” all day, according to the company.

It was the first new breakfast product since the company added McGriddles in 2003.

The company is also shifting its market toward more of a regionalization strategy. “We feel there’s more regionalization to breakfast, and therefore we’re going to swing a little bit more of our emphasis on marketing to local co-ops to take ownership of that,” CEO Steve Easterbrook said in October.

According to Business Insider, the Donut Sticks would come at six for $1.29 or a dozen for $2.39. They would only be available in the morning, as the company hopes to drive more traffic during the breakfast hours.

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