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
Share Now on:
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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

Will the federal government extend the extra COVID-19 unemployment benefits?

It’s still unclear. Congress and President Donald Trump are deciding whether to extend the extra $600 a week in unemployment benefits workers are getting because of the pandemic. Labor Secretary Eugene Scalia believes the program should not be extended, and White House economic adviser Larry Kudlow said the additional money is disincentivizing some workers from returning to their jobs. Democrats want to keep providing the money until January.

As states lift restrictions, are people going back to stores and restaurants?

States have relaxed their restrictions, and many of us have relaxed, too. Some people have started to make exceptions for visiting restaurants, if only for outdoor dining. Some are only going to places they trust are being extra cautious. But no one we’ve talked to has really gone back to normal. People just aren’t quite there yet.

Will surges in COVID-19 cases mean a return to lockdowns?

In many areas where businesses are reopening, cases of COVID-19 are trending upwards, causing some to ask if the lockdowns were lifted too soon, and if residents and businesses might have to go through it all again. So, how likely is another lockdown, of some sort? The answer depends on who you ask. Many local officials are now bullish about keeping businesses open to salvage their economies. Health experts, though, are concerned.

You can find answers to more questions here.

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