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Fast-food chains tap into breakfast market



Published: Fri, October 27, 2006 @ 12:00 a.m.



More restaurants are challenging McDonald's dominance at breakfast.

RALEIGH NEWS & amp; OBSERVER

Raleigh, N.C., resident Violeta Tisdale grew up eating breakfast at McDonald's and Burger King.

She still eats breakfast out, usually three or four times a week. But she's branching out.

"I like Wendy's and Chick-fil-A because you can get chicken and do away with the bacon and the sausage," she said. "Especially when you're bringing the kids out, you try to be healthy."

It's busy and frequent breakfast eaters such as Tisdale who are being targeted by a legion of fast-food restaurants, all pushing biscuits, bagels and biscotti as America's demand for on-the-go breakfast grows.

U.S. breakfast sales are already estimated to be 40 billion annually, reports Technomic, a Chicago food research firm. The potential is growing as Americans eat out more, drink more gourmet coffee in the morning and look for fast alternatives.

In the ultracompetitive restaurant business, breakfast is the latest battleground for boosting profits and market share.

Restaurants don't release specific breakfast sales, but Technomic executive vice president Bob Goldin said McDonald's has long been the leader, with as much as a third of its sales at breakfast.

"The other chains are probably sitting there saying, 'McDonald's owns this business. Why don't we get a piece of it?'" he said. "Even if they get even a small piece, it's supplemental income."

Mulling 24-hour breakfast

But it looks like McDonald's might start an offensive of its own. Executives last month speculated about moving to 24-hour breakfast service, citing the food's increasing popularity. The company says there are no immediate plans to make a switch.

While McDonald's considers the 24-hour option, interest in breakfast continues to climb. Research firm The NPD Group reported an 8 percent increase in morning meal traffic for the three-month period ended February 2006 over the corresponding period in the previous year.

Breakfast patrons are often new customers and not repeats from the lunch and dinner crowds, said Chris Latta, owner and operator of a Chick-fil-A in Raleigh. That makes them particularly valuable.

"Breakfast customers are the most habitual customers of the day," he said. "They go to the same place at the same time each day."

Other chains are pushing breakfast, too:

Wendy's is testing a breakfast menu in Raleigh and Kansas City.

Starbucks is looking to get more sales from its legion of morning coffee drinkers and is introducing hot breakfast items in markets such as Charlotte, N.C.

"Fast casual" restaurants such as Panera Bread and Cafe Carolina also are wooing breakfast customers.




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