McDonald's all-day breakfast — A boon or a bust?

by Monica Watrous
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OAK BROOK, ILL. — A few weeks in, the national roll-out of all-day breakfast at McDonald’s is either a hit or a headache, depending on whom you ask.  

Steve Easterbrook, president and chief executive officer, said the move has been met with high enthusiasm from the fast-food chain’s customers.

“The anecdotals I get as I move around the country and get into the restaurant is, if you are in a student town, you are seeing a lot of activity into the evenings and the overnights around breakfast items; it’s cultish amongst the students,” Mr. Easterbrook said during an Oct. 22 earnings call with financial analysts. “But you can go into a restaurant in the mid-afternoon to see a more mature group of people sitting there who can now enjoy that they can have their Egg McMuffin mid-afternoon and having to stop clock watching and try to make the 10:30 a.m. deadline. It just makes life easier for customers.”

But it may not be making life easier for the restaurant operators, some of whom revealed in a survey by Japanese firm Nomura that round-the-clock hotcakes led to logjammed kitchens, compromised quality and slower service.

McDonald's breakfast, egg Mcmuffin, hashrbown, coffee
McDonald's all-day breakfast menu move may be causing complexity for operators.

At a time when McDonald’s is striving to simplify operations, adding all-day breakfast may be creating complications.

“There is an operational complexity,” admitted Mr. Easterbrook, “but not an ingredient complexity.”

To his point, McDonald’s employees already are familiar with the components, processes and equipment involved. However, some of the restaurants were required to purchase additional equipment to cook eggs and burgers simultaneously, and some restaurants needed different toasters, a McDonald’s spokesperson told Food Business News. And according to reports, some franchisees had to hire new employees in response to increased demand.

For its part, McDonald’s has worked to make all-day breakfast a bit easier for operators to swallow. For starters, the post-10:30 a.m. breakfast offerings are limited to a selection of McMuffin sandwiches or biscuit sandwiches, hotcake platters, sausage burritos, fruit and yogurt parfaits, fruit and maple oatmeal and hash browns. Additionally, the company previously removed a number of complicated, lower-selling items to accommodate extended breakfast.

“And as we offer more abilities to customize and personalize food going forward, that may give us another opportunity to actually take further items off,” Mr. Easterbrook said. “The trouble with saying simplification is that means whenever you do add anything to your restaurant, people turn around and say, ‘Hold on a minute, that’s going to make it more complex.’

“We’re not going to be static. We are going to be energetic. We will innovate. We will have new products. It is fun. That is what customers want. We’ve got to make sure we take more than that out of the restaurant complexity.”

When McDonald’s launched all-day breakfast on Oct. 6, the company said it had been the top request of customers. The concept was tested earlier this year in select markets with positive results and nearly unanimous approval from operators, Mr. Easterbrook said.

“It is early days to give too much of a read on sales, but we're certainly encouraged,” he said. “We are starting higher, as you would expect, out of the box than what we would expect our steady run rate to be when things settle down, but we see it being an incremental profitable business that is driving existing customers in more often and attracting new customers.”
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READER COMMENTS (5)

By Roy E Dixon 11/1/2015 8:14:17 AM
In my opinion, the 24 hour breakfast was an excellent move on McDonalds behalf. Operators/Employees may have to work harder, but isn't such what can lead to success on many fronts in life

By Mike 10/30/2015 9:00:33 AM
So far, I find the McMuffin quality to have fallen as some locations seem to be holding them in a warmer, even during breakfast! This could wind up being a net loss.

By ThinkWay 10/30/2015 7:49:08 AM
I suspect the key metric for success won't be revenue alone. Breakfast around the clock will obviously cannibalize other sales. The question in my mind is whether or not McDonald's can swallow lower register rings for high gross margins.

By Disappointed 10/27/2015 2:40:05 PM
Whats the deal? Why are sausage biscuits not available and sausage egg and cheese biscuits are?

By Tom 10/27/2015 1:27:38 PM
It would be great for me, but I have not made a purchase of breakfast outside of former breakfast hours since hash browns are not offered in my area.