Feeling the heat from new competitors, McDonald’s Corp. is overhauling its kitchens to speed up and expand its breakfast service, a move many franchisees see as a prelude to all-day breakfast.
In a memo to franchisees obtained by Crain’s, McDonald’s executives said the “breakfast optimization” program is intended to bring greater efficiency to the production of Egg McMuffins, McGriddles and other morning fare.
In the memo, McDonald’s calls breakfast optimization “a critical element — and important first step — of our 2007-2009 Plan to Win” and says the program is intended to “make it easier and more efficient for our managers and crew to deliver a quality breakfast experience.”
But franchisees see a more dramatic change behind the new machines and reconfigured kitchen layouts called for under the program: abandonment of the traditional 10:30 a.m. cutoff for breakfast service at McDonald’s. “That’s the speculation on the street,” says Oklahoma franchisee Steve Biddle.
A McDonald’s spokesman denies any connection between the program and expanded breakfast hours, insisting that the effort is solely aimed at improving operations during what has become the chain’s most important mealtime.
Not only is breakfast the fastest-growing segment of the fast-food day, it’s also the most profitable, because eggs and pork cost less than beef and chicken. That explains why chains like Wendy’s, Starbucks and Burger King are expanding their offerings. This week, Burger King will begin selling some breakfast items for $1. The chains are hoping to challenge the dominance of McDonald’s, which has about 15% of the $50-billion to $60-billion breakfast market, according to Chicago restaurant consultancy Technomic Inc.
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