COVID-19

With commuting down, fast-food breakfast sales have slowed

Justin Ho Jun 11, 2020
Heard on: Marketplace Morning Report
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The largest share of Starbucks sales happen during the morning commute, but competition over breakfast sales has all but evaporated. Justin Sullivan/Getty Images
COVID-19

With commuting down, fast-food breakfast sales have slowed

Justin Ho Jun 11, 2020
The largest share of Starbucks sales happen during the morning commute, but competition over breakfast sales has all but evaporated. Justin Sullivan/Getty Images
HTML EMBED:
COPY

This week, Starbucks said the coronavirus pandemic will take an estimated $3 billion toll on its sales this quarter. Fewer people are walking into a Starbucks to get coffee, with the safety concerns and stay-at-home orders.

But Starbucks also makes a lot of money selling people breakfast along with their coffee. And with fewer people commuting these days, that revenue is drying up.

Up until the crisis, breakfast had been a battleground for chains like Starbucks, McDonald’s and Wendy’s.

Darren Tristano, CEO of Foodservice Results, said Starbucks’ strategy has been to offer more breakfast items, like sandwiches and baked goods, “in order to raise the check average and to give their customers more reasons to come in.”

Tristano said the largest share of Starbucks sales happen during the morning commute.

But as restaurants have adapted to the pandemic by offering more takeout and delivery, people have been mostly ordering like that for lunch and dinner, said David Henkes at Technomic.

“Breakfast has really been one of the casualties of this whole pandemic,” Henkes said.

He said the competition for breakfast dollars has all but evaporated. The new battleground is convenience.

“Any restaurant chain that’s had a drive-through or delivery system in place has held up better than others,” Henkes said.

He said that’s why Starbucks is investing more in pick-up-only locations.

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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