By Kim Smiley
Are you “lovin’ it” now that McDonald’s offers breakfast all day? If so, you are not alone because McDonald’s has stated that extended breakfast hours had been the number one request by customers. After recent declines in sales, McDonald’s is hoping that all-day breakfast will boost profits, but some franchise owners are concerned that extending breakfast hours will actually end up hurting their businesses.
Offering breakfast during the day is not as simple as it may sound because McDonald’s are now required to offer breakfast in addition to their regular fare. Cooking only hash browns in the fryers is inherently simpler than figuring out how to cook both hash browns and fries at the same time. Basically, attempting to prepare breakfast simultaneously with traditional lunch and dinner items creates a more complicated workflow in the kitchen. Complication generally slows things down, which can be a major problem for a fast food restaurant.
If customers get annoyed at increased wait times, they may choose to visit one of the many other fast food restaurants, rather than McDonald’s, for their next meal out. Many franchisees are investing in more kitchen equipment and increasing staffing to support extended breakfast hours, both of which can quickly eat into the button line. Increased profits from offering all-day breakfast will need to balance out the cost required to support it or franchise owners will lose money.
Franchise owners have also expressed concern that customers may spend less money now that breakfast is an option after 11 am. Breakfast items in general are less expensive than other fare and if customers choose to order an egg-based sandwich for lunch rather than a more expensive hamburger it could potentially cut into profits. It all depends on the profit margin on each individual menu item, but restaurants need to make sure they aren’t offering items that will compete with their more profitable offerings.
The changing menu also has the potential to frustrate customers (and frustrated customers will generally find somewhere else to buy their next lunch). The addition of all-day breakfast has resulted in menu changes at many McDonald’s and more menu variability between franchises. The larger the menu offered the more difficult it is to create cheap food quickly so some less popular items like wraps have been cut at many McDonald’s locations to make room for breakfast. If you are a person who loves wraps and doesn’t really want an egg muffin, this move is pretty annoying. The other potential problem is that most McDonald’s are only offering either the English muffin-based sandwiches or the biscuit-based sandwiches (but not both) after the traditional breakfast window. So depending on the McDonald’s, you may be all fired up for an all-day breakfast Egg McMuffin to be told that you still need to get there before 10:30 am to order one since about 20 percent of McDonald’s have chosen to go with biscuit-based breakfast sandwiches instead.
There are multiple issues that need to be considered to really understand the impacts of switching to all-day breakfast. Even seemingly simple “problems” like this can quickly get complicated when you start digging into the details. A Cause Map, a visual root cause analysis, can be used to intuitively lay out the potential issues from adding all-day breakfast to menus at McDonald’s. A Cause Map develops cause-and-effect relationships so that the problem can be better understood. To view a Cause Map for this example, click on “Download PDF” above.
Studies have found that at least one quarter of American adults eat fast food everyday (which could be its own Cause Map…) so there are a lot of dollars being spent at McDonald’s and its competitors. Only time will tell if all-day breakfast will help McDonald’s gobble up a bigger market share of the fast food pie, but fast food restaurants will certainly continue trying to outdo each other as long as demand remains high.