Mt. Vernon Register-News

Features

February 24, 2014

Taco Bell to take on McDonald's breakfast with eggs in waffles

Ident: X4271

Selector: tmlaa

Priority: r

Slug: bc-tacobell

bc-tacobell 02-24 619

(bbg) (ATTN: Financial editors)

//Taco Bell to take on McDonald's breakfast with eggs in waffles//

By Leslie Patton

(c) 2014, Bloomberg News.



Americans will soon be able to get their morning eggs wrapped in a waffle taco.

Yum Brands' Taco Bell chain will introduce breakfast foods such as waffle tacos, egg burritos and the bacon A.M. Crunchwrap nationwide on March 27. The move expands on a trial run that began in some locations in 2012, bringing a breakfast menu to 5,500 of Taco Bell's more than 5,700 U.S. restaurants.

 In pursuing morning diners, the chain is going up against McDonald's, the maker of the Egg McMuffin and the industry's top breakfast seller, said Bob Goldin, an executive vice president at Chicago-based industry research firm Technomic. McDonald's accounts for 31 percent of all fast-food sales in the morning, according to Technomic data.

"No one has come up with an Egg McMuffin killer," Goldin said in an interview. "It's an iconic product; it's hard to compete against."

For Taco Bell and other chains, breakfast represents a bright spot in an industry battered by competition and slumping consumer confidence. At fast-food and fast-casual restaurants, revenue from breakfast items grew 4.8 percent annually on average from 2007 to 2012, climbing to $31.7 billion, according to Technomic. That outpaced total sales growth of about 2.5 percent a year during that time.

As chains struggle to attract diners and boost same-stores sales, McDonald's and Burger King Worldwide have said they're focused on improving and advertising their morning menus. Starbucks also plans to revamp its breakfast sandwiches next month.

Taco Bell began testing breakfast foods in some locations about two years ago, offering items such as scrambled egg- stuffed waffles. Taco Bell's test items, which will now be offered nationally, include the $2.49 bacon A.M. Crunchwrap, which packs 650 calories, and a $1.79 coffee. That's pricier than the fare at McDonald's, which sells sausage burritos, sausage biscuits and cups of coffee for $1 each in its 14,100 U.S. restaurants.

Most Americans aren't willing to spend more than $3 on a fast-food breakfast, Goldin said. It's hard to challenge McDonald's, where "you can get breakfast really cheap."

Past attempts at selling breakfast food haven't gone well. Wendy's tested morning foods such as home-style potatoes and chicken biscuits in certain U.S. markets from 2010 to 2012. The company said last year that it was discontinuing breakfast because it wasn't satisfied with its financial performance.

Shares of Louisville, Ky.-based Yum, which also owns KFC and Pizza Hut, have decreased 3.7 percent this year through the close of trading last week. McDonald's, based in Oak Brook, Ill., is little changed this year, while Burger King has gained 14 percent.

Like Taco Bell, Burger King is trying to boost sales by appealing to consumers in the morning. In January, the Miami- based company gave away free cups of Seattle's Best coffee when customers bought one of their 18 different breakfast sandwiches. They also sell French toast sticks, sausage burritos and fruit smoothies.

"Breakfast is an opportunity," Alexandre Macedo, president of Burger King's North American unit, said during an earnings call earlier this month. "We started to work in breakfast in January, and we expect to continue to do that by the end of the year."

Burger King posted a 0.2 percent fourth-quarter gain in same-store sales in the U.S. and Canada, a better performance than McDonald's and Yum, which both reported declines.

"Doing breakfast right is very difficult," said Gary Stibel, founder and chief executive officer of the Norwalk, Conn.-based New England Consulting Group, which has advised restaurants such as McDonald's and Taco Bell in the past. It's not just about the menu, he said. Speed is critical.

"You've got to be able to get people in and out," he said.



 

1
Text Only
Features
  • Has the ipad lost its swag?

      The company reported this week that sales of its sleek, pricey tablet were down 19 percent from last quarter and 9 percent year-over-year. CEO Tim Cook tried to reassure investors that Apple's new partnership with IBM to sell its devices to IBM's corporate customers will help make iPads ubiquitous in the workplace. "This isn't something that worries us," he said of the iPad sales decline. But the numbers are disappointing no matter how you spin them.

    July 24, 2014

  • Darth Vader is polling higher than all potential 2016 presidential candidates

    On the other hand, with a net favorability of -8, Jar Jar is considerably more popular than the U.S. Congress, which currently enjoys a net favorability rating of -65.

    July 23, 2014

  • Hospitals let patients schedule ER visits

    Three times within a week, 34-year-old Michael Granillo went to the emergency room at Northridge Hospital Medical Center in Los Angeles because of intense back pain. Each time, Granillo, who didn't have insurance, stayed for less than an hour before leaving without being seen by a doctor.

    July 22, 2014

  • Wal-Mart to cut prices more aggressively in back-to-school push

    Wal-Mart Stores plans to cut prices more aggressively during this year's back-to-school season and will add inventory to its online store as the chain battles retailers for student spending.

    July 21, 2014

  • Your chocolate addiction is only going to get more expensive

    For nearly two years, cocoa prices have been on the rise. Finally, that's affecting the price you pay for a bar of chocolate - and there's reason to believe it's only the beginning.

    July 18, 2014

  • web_starbucks-cof_big_ce.jpg Starbucks sees more Apple-like stores after Colombia debut

    This week Starbucks opened its first location in Colombia — a 2,700-square-foot store with a heated patio, concrete columns, mirrors on the ceiling and walls of colorful plants.

    July 17, 2014 1 Photo

  • Screen Shot 2014-07-16 at 11.16.48 AM.png VIDEO: Comcast apologizes after customer service call goes viral

    Comcast issued an apology after one of its representatives kept a customer captive on the phone for nearly 20 minutes, demanding to know why he was choosing another cable provider.

    July 16, 2014 1 Photo

  • 20110929_bowling.jpg Why fewer people go bowling

    Like other industries facing tough economic times, America's bowling centers are trying to reinvent themselves.

    July 15, 2014 1 Photo

  • Almost half of the world actually prefers instant coffee

    Americans' taste in coffee might be getting more high-end _with a growing fixation on perfectly roasted beans, pricier caffeinated concoctions, and artisan coffee brewers - but it turns out a surprisingly big part of the world is going in the opposite direction: toward instant coffee.

    July 14, 2014

  • Screen Shot 2014-07-09 at 11.24.10 AM.png VIDEO: Pilot buys pizzas for storm-delayed travelers

    A Frontier Airlines pilot went above and beyond the call of duty when a recent flight from Washington, D.C. to Denver was diverted to Cheyenne, Wyoming due to bad weather.

    July 10, 2014 1 Photo

Twitter Updates
Facebook
Stocks