Marketplace Logo Donate

Daily business news and economic stories from Marketplace

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

Heard on:
A worker hands a customer a tray holding two coffees at a McDonald's drive-thru in Plainview, New York, in March.

Fast-food chains were investing more heavily in breakfast foods before the pandemic started. Bruce Bennett/Getty Images

get the podcast

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.

What's Next

Latest Episodes From Our Shows

Listen
5:37 PM PDT
14:41
Listen
3:39 PM PDT
28:05
Listen
1:45 PM PDT
1:50
Listen
7:33 AM PDT
7:47
Listen
Jul 6, 2022
6:04
Listen
Jun 30, 2022
31:02
Listen
Jul 5, 2022
26:25
Exit mobile version