Want to win at breakfast? Operators who want to better be fast, because convenience and speed are a big deal. The only way to get customers in the morning is to be able to get them through quickly.
Or maybe not. After all, it’s not uncommon to see people crowd into the waiting areas of some family-dining concepts for 45 minutes or longer if the breakfast is right.
“During the week, people generally want quicker,” says Bruce Dean, CEO of 100-unit Black Bear Diner. “They get to work, they have an hour at lunch. But on weekends people will wait to get in and sit at the table and that’s great for us.” Breakfast is an increasingly competitive daypart—but it’s also bifurcated based upon consumer needs.
According to data from GroundTruth and Technomic Transaction Insights, 16% of all restaurant foot traffic occurs at breakfast. And comments from traditional industry stalwarts such as McDonald’s Corp. and Dunkin’ Donuts suggest the competition for that traffic is intensifying.
Those winning are meeting consumers’ need states, be it for convenience or a longer “experience.” Consumer needs at breakfast shift heavily based on the day of the week. And while speed frequently is important, there are still many occasions in which consumers sit and enjoy themselves and are willing to wait for a table. As such, there are different strategies for winning in the morning based on whether a concept is fast, or slow.
Speed it up
Fast food shines in the morning. Quick-service restaurants dominate the a.m. daypart, more than they do any other time of day. According to GroundTruth data, fast-food chains account for 78.4% of breakfast foot traffic. No other segment in the industry is above 8%. By contrast, quick-service chains account for 69.7% of all traffic.
In other words, the convenience and speed offered by limited-service chains is more important to consumers in the morning than any other time of day. Indeed, 19.9% of consumers say convenience matters most at breakfast, according to Technomic Consumer Brand Metrics, whereas just 13.8% say convenience is most important at lunch, and 14.4% say it matters most at dinner. At the same time, the “experience” isn’t as crucial to morning diners, with only 44.1% of consumers saying that the experiences matters, less than any other daypart.
One reason could be that nearly 52% of consumers dine alone at breakfast, finds Technomic. No other daypart comes close to that figure. And nearly a quarter of breakfast customers go through the drive-thru for their meal.
“A good coffee and possibly tea platform is a must,” says John Gordon, a restaurant consultant based in San Diego. “Having a proprietary or named blend beats generic coffee most of the time.” But today’s diner expects more than just quality caffeination from any breakfast spot.
Gordon says the call for convenience at breakfast means brands should ensure that their products travel well and are portable, not matter what segment they’re in. Many chains, including those that focus on the experience are finding success by working convenience into their businesses. Black Bear, for instance, offers delivery at 66 of its locations, and Dean is convinced that has helped lift same-store sales this year. “It’s really made a difference,” he said.
Smart concepts are catering to the need for convenience while also attempting to grow their breakfast business. McDonald’s and Starbucks, the two largest restaurant chains by sales in the U.S., are big players in that morning daypart. Another QSR in the top 10, Dunkin’ Donuts, is also heavily used at breakfast.
But the daypart is getting increasingly competitive—so much so that Subway, which is known for being a convenience-driven brand, largely gave up on the daypart, leaving it up to franchisees and markets.
That growing competition—and big players stepping back—suggests that operators wanting to gain breakfast traffic need to focus on the right type of convenience. That could include drive-thrus along busy commuting thoroughfares—ideally on the side of traffic that sees the morning rush. Because, after all, people hate turning left.
Technology can also help with increased convenience, but only to a certain extent. While Starbucks has grown considerably in recent years, in part through the use of technology, even it has seen some tech-driven blowback. The chain’s traffic has been weak this year, for instance, because of in-store bottlenecks created when customers order from the app and then wait for their drinks.
Quality matters, too
Fast-food chains aren’t just competing to be the fastest. Many are also stepping up their games in the morning by improving the quality of their products. McDonald’s, for example, has largely dominated fast-food breakfast for years. In the past, it has generated customer-count growth even when the rest of the business suffered. That trend, however, ended this year. “We’re still losing a little share,” CEO Steve Easterbrook said in October.
As such, the chain is pushing higher-quality items now. It added Triple Breakfast Stacks in November: Biscuit, McMuffin or McGriddle sandwiches with two pieces of sausage, egg, bacon and cheese. It is also testing larger French Toast McGriddle sandwiches.
Not to be outdone, Dunkin’ Donuts—which, like McDonald’s, is also facing weak traffic—is upgrading its espresso.
On weekends, breakfast frequently belongs to family-dining chains that push higher-quality ingredients and service, such as Black Bear. “When we set down a plate of food at breakfast, I want the customer to say ‘Wow,’” Dean says. “We serve a large portion of largely homemade products. Our proteins are big. The biscuits are big. The plate is filled with potatoes. We don’t measure the potatoes, we just fill the plate. It really makes a difference.”
Breakfast is key for family-dining chains. According to GroundTruth data, 21.7% of foot traffic at these restaurants comes at breakfast. But breakfast isn’t just driving traffic during prime morning hours. Many executives of these chains say their breakfast items are popular throughout the day. In fact, these all-day breakfast menus are helping these chains win during off-peak hours. Another 8% of family-dining chains’ traffic comes during the “a.m. snack” time, which is defined as 10-11 a.m. In addition, 13% of family-dining traffic comes late at night, which also might be customers ordering breakfast.
Growth of daytime-only
Many breakfast and lunch chains have also emerged in recent years, targeting consumers who dine out with families or friends on weekends, such as First Watch and Snooze, an AM Eatery. Snooze has found success with its full bar, something not typical of breakfast-focused spots; the offering caters to customers who want a cocktail with brunch or to workers with nontraditional hours coming off the overnight shift. “People love going out to breakfast,” CEO David Birzon says. “It’s very difficult to replace at home.”
The waits, however, put a lot of burden on the restaurants and the employees to ensure they’re getting the job done right, with a good meal and quality service. “The pressure is on us more than any other business because our waits are longer than any other business,” Birzon says. “Why do you wait for something? Because you want to experience it.”
Restaurant owners at these and family-dining chains are working to alleviate waits, in part because they know customers have a threshold for the amount of time they will spend in the lobby. Today, online waitlists are becoming more common, with companies putting their efforts behind getting customers through without sacrificing the experience for those already at the tables. “Our job is to shorten the wait period,” Dean says. “That’s something we continually work on.”