Pandemic Puts the Fast Food Breakfast Boom on Pause



A Pre-Pandemic Push for Breakfast Customers

Before the pandemic, many fast food restaurants saw breakfast as the most important meal of the day for growing their sales. Now,, as many people’s morning commutes consist of walking down the hallway instead of driving to an office, people are eating breakfast at home instead of picking it up at a restaurant on the way to work.

Between 2014 and 2019, breakfast traffic at fast food restaurants climbed by 7.7% and the amount of money customers spent on fast food breakfasts rose by 31%. Restaurant chains spent millions of dollars and hired thousands of workers to capture the attention of the breakfast crowd.

Wendy’s (WEN) introduced its Breakfast Baconator sandwich, McDonald’s (MCD) launched Doughnut Sticks as well as new and improved coffee. Right up until the pandemic, breakfast sales were climbing. During early March 2020, breakfast sales were 5% higher than they had been during the same period a year ago. Now, morning routines have been upended, and the breakfast boom seems to have come to a halt.

Breakfast Sales Still Lag Behind

In mid-April, breakfast transactions at fast food restaurants were 54% lower than during the same period a year earlier. This was worse than the 42% drop in overall transactions at fast food restaurants. Business has picked back up for fast food restaurants, thanks to drive through sales, curbside pickup, and other initiatives—but, breakfast sales still lag behind.

Fast food chains poured resources into luring customers away from cereal and toast at home, hoping they would develop habits of buying breakfast on the way to work which would last for years. Now, many restaurants are wondering if these efforts will be counteracted by people forming new habits while working from home.

Gains for the At-Home Breakfast Industry

While fast food chains are struggling to regain breakfast customers, companies that make at-home breakfast options are seeing growth. Kraft Heins (KHC) has seen strong performances from its breakfast-centric brands like Oscar Mayer bacon, Maxwell House coffee, and Philadelphia cream cheese. Cereal sales, which have lagged in recent years, are also up, benefitting companies like General Mills (GIS), Kellog’s (K), and Post (POST).

Consumers are also purchasing more breakfast-related kitchenware, like waffle irons and coffee makers, which suggests that people may stick to eating breakfast at home even once they return to the office. Heading into the winter, investors in the fast food landscape as well as in the at-home breakfast industry will have a close eye on customers’ morning habits.


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