Burger King (BKW, Financial) recently announced it will begin serving burgers in the early hours of the morning. They are entering into competition with McDonald's (MCD, Financial), and Taco Bell of Yum! Brands (YUM, Financial) who are already the ruling kings of the breakfast sector.
The Battle
As the battle for breakfast among fast food giants heats up, many quick service chains are gearing themselves to attract the morning crowd. In April, Taco Bell launched its A.M Crunch Wrap and Waffle Taco as a part of their breakfast offering. Taco Bell also came out with advertisements featuring a host of men named Ronald McDonald praising Taco Bell. This was a clear move to bring down the popularity of McDonald's which is already the "big daddy" of the breakfast sector.
McDonald's, which owns 25 percent of the breakfast market, fought back with free coffee for two weeks in April and an ad campaign of its own mocking Taco Bell in an attempt to boost sales and keep customers.
The current menu offered by Burger King is the Croissan’wich, Sausage Biscuit, Cinnabon minibon and Seattle’s Best Coffee. The fast food giant feels that some morning commuters want more than just a breakfast burrito and ham, and egg sandwich for breakfast. So to fulfill their needs they are offering its signature Whopper as well as few other burgers and chicken sandwiches in the morning. The “Burgers for Breakfast” campaign will begin rolling out at 5,000 Burger King outlets across the country.
The Odds
Many analysts feel that serving burgers for breakfast is a high-risk step taken by Burger King. Maximum people on waking up in the morning prefer coffee and then something that goes with it. So they might walk in to Dunkin Donuts (DNKN, Financial) or Starbucks (SBUX, Financial) rather than entering Burger King.
By adding burgers to their breakfast menu they are riding away from the anti-obesity trend. Health-conscious people will definitely steer away from Burger King to keep them healthy and fit. By introducing burgers in the breakfast menu it might end up cannibalizing the lunch and dinner markets as someone who has had burger for breakfast won’t return again for lunch or dinner.
The new breakfast menu could be appealing to people who have been working late at night and returning home in the morning or to people who want to have lunch earlier in the day. It is a low-cost strategy opted for by the food giant and if it gains popularity then it could be a good thing to boost numbers. Because of intense competition and sluggish revenue Burger King had to take this step to maintain its position.
The Takeaway
Burger King’s new breakfast menu has created a hush among the food giants of the world. The new competition offered is a stiff one and since breakfast is a big business, all the fast food chains have to stand out one way or the other to appeal to customers. For the burger lovers it’s a treat to wake up in the morning and indulge themselves in a lavish burger treat. Burger King is already one of the loved fast food chains of the U.S., so they are not putting any kinds of commercial like Taco Bell and McDonald's did but might work on some radio commercial.
