- McDonald's, Starbucks, and Dunkin' said breakfast sales are continuing to slump, even as sales through the rest of the day have improved during the coronavirus pandemic.
- "Breakfast has dried up," Panera CEO Niren Chaudhary told Business Insider.
- Chains are hoping to make up lost breakfast sales by selling food and drinks later in the day, as many customers no longer make their morning commutes to the office.
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Americans are now eating the most important meal of the day at home — if they bother at all.
Chains including McDonald's, Starbucks, and Dunkin' reported over the last week that breakfast sales are continuing to slump, even as sales through the rest of the day have improved during the coronavirus pandemic.
Prior to the coronavirus, breakfast was a growing market, which drew more competition. Wendy's launched a national breakfast menu in March, while Panera has been trying to draw in more breakfast with a coffee subscription service.
"Breakfast ... prior to the pandemic was the only day part that was growing," McDonald's CEO Chris Kempczinski said on a call with investors this week. "And so as a result, there were a lot of new competitors that were flooding into the breakfast day part. That certainly was one area of pressure for us."
Kempczinski said McDonald's had actually grown its share of the breakfast market during the pandemic. However, so few people are dining out for breakfast it is still the chain's most challenging meal of the day and dragging down overall sales.
Starbucks and Dunkin' both said they'd seen significant shifts in their breakfast business, as people working from home stop grabbing a coffee on their morning commute.
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Starbucks said customer visits were peaking at 9:30 a.m. and 2:30 p.m., with more customers getting afternoon snacks, and that stores were being staffed accordingly. At Dunkin', sales shifted from early morning to mid-day, 11 a.m. to 2 p.m.
"There's not much recovery in the breakfast day part right now. In terms of day part, breakfast has dried up," Panera CEO Niren Chaudhary told Business Insider.
Panera has been working to build its breakfast business over the last few years, launching an unlimited coffee subscription service in February. In late June, Panera made another push to get people to sign up for the service with free drinks. Now, however, Chaudhary says that more people are coming to get their coffee later in the day. Dinner sales at the chain, he says, have exploded recently.
"If anything, we're seeing the consumption of coffee starting later in the morning than it used to, and kind of extend more through the day than it has done in the past," Chaudhary said.
To combat the loss of business in the early morning, Starbucks is trying to sell more snacks to accompany drink orders, including plans to add a plant-based protein box to the menu. Dunkin' executives said that espresso drinks and specialty beverages such as matcha lattes have performed well, convincing customers to visit later in the day to buy drinks that they can't make themselves at home.
Even though breakfast sales are slumping now, McDonald's is determined to keep hold of its title as king of fast-food breakfast.
"As we emerge out of this, I think part of it is certainly going to be a re-dedication from a marketing and investment standpoint to go after breakfast," Kempczinski said, hinting that menu innovation is in the works.