COVID-19

As office workers mostly work from home, coffee and breakfast chains scramble to boost sales

Kristin Schwab Nov 5, 2020
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Fast-food chains were investing more heavily in breakfast foods before the pandemic started. Bruce Bennett/Getty Images
COVID-19

As office workers mostly work from home, coffee and breakfast chains scramble to boost sales

Kristin Schwab Nov 5, 2020
Fast-food chains were investing more heavily in breakfast foods before the pandemic started. Bruce Bennett/Getty Images
HTML EMBED:
COPY

Before the pandemic, fast-food and fast casual chains were investing more in breakfast, developing new items, installing fancy espresso machines and rolling out all-day breakfast. Now, with more of us working from home, those sales are way down. 

So why is breakfast so valuable to these restaurants and how are chains trying to get customers back in?

Breakfast is one of those meals that a lot of busy workers, parents and students do on auto-pilot, said Aaron Allen, a restaurant consultant.

“When you think of morning, you think of coffee,” Allen said. “And for many, Starbucks is a ritual — a daily ritual. But that’s changed since COVID.”

That’s a drag for restaurants, which had been investing more and more in breakfast because coffee and eggs have huge profit margins — and breakfast sells. Usually, a third of the McDonald’s sales come from breakfast alone, said R.J. Hottovy, consumer strategist at Morningstar.

“Restaurants had seen what McDonald’s has done, and so I think this was really an area focus for a lot of companies,” he said.

But in the pandemic, McDonald’s said breakfast has been its biggest loser. Still, chains are likely to take a gamble that breakfast will bounce back, Hottovy said.

“I don’t think restaurant companies are going to give up on the breakfast category, but I think you’re going to start to see more innovations to satisfy changes in consumer behavior,” he said.

That might mean adding more bacon, butter and biscuits to menus, said Lizzy Freier, senior research manager at Technomic, with a focus on menu trends. It’s an emotional time, and consumers have been doing some emotional eating.

“The reason that people were ordering from restaurants was because of cravings,” she said. “That increased from the first quarter and has continued to increase into the third quarter as well.”

Freier said companies will also have to rethink packaging for delivery, because breakfast food can be tricky.

“Especially if you have, you know, an overeasy egg or something. You know that’s not going to be overeasy in 10 minutes,” Freier said.

And that’s a challenge when the biggest competition is the eggs already in a customer’s fridge.

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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