An all-out American fast food breakfast war is upon us.
McDonald’s, which once enjoyed an effective monopoly on the morning fast-food rush, has found itself nudged up against all sorts of egg sandwich-serving competition these days. “We’ve had some of our major competitors that have made runs at breakfast, and it seems every year there’s someone new that is making a run,” CFO Peter Benson said in the company’s earnings call yesterday.
While McDonald’s still derives a substantial chunk of its US sales from its breakfasts—some 25%—the fast food egg-o-sphere is getting rather crowded. The US breakfast business at fast-food chains has morphed into a $50-billion monster.
The thing is, McDonald’s claims it doesn’t care. In fact, it doesn’t even seem to take its competition all that seriously.
Are Americans defecting from the Egg McMuffin to try things like Taco Bell’s new waffle taco? Sure, says Benson. But it’s only natural for people to explore new things, he told investors yesterday: “It’s new, it will be something that they’ve not seen in the marketplace, so we expect customers to try it.” McDonald’s has responded to the buzz swirling around new offerings by creating some buzz of its own. Earlier this month, it struck out against its breakfast competition by offering free coffee for two weeks.
But just because people are trying all the new fast food breakfast fare, doesn’t mean they won’t—if they haven’t already—come back to the Egg McMuffin. According to Benson, what’s good for breakfast is going to be good for McDonalds. “I think that new entrants into the market always bring a different level of attention to breakfast, which in many cases supports us,” Benson said. “We have become America’s favorite place to eat breakfast. And we don’t plan on giving that up.”
By defining themselves in opposition to McDonald’s—as Taco Bell does in a recent spot mocking the Egg McMuffin as old-fashioned—its competitors may actually end up confirming the supremacy of the world’s largest fast food chain.
For its part, McDonald’s has projected nonchalance in the face of these challenges. After Taco Bell unveiled the first national commercial for its new breakfast line, which slyly featured a handful of men who happened to be named Ronald McDonald—like McDonald’s long-time mascot—McDonald’s responded by sharing a clever photo on Facebook: “Imitation,” it announced, “is the sincerest form of flattery.”