U.S. consumers haven’t been going out to quick-serve restaurants (QSRs) in big numbers for breakfast. But several leading chains have identified the breakfast category as a key opportunity for growth. To generate more business and to steal market share from competitors, ad budgets are getting pumped up.
The latest research shows that about 64% of U.S. consumers went to a QSR at least once for breakfast last year. Dave Jenkins, founder of CustomersDNA says that to grow the market, QSRs have to make a pitch for ‘dual’ customers – these are the consumers who will stop by a restaurant about 11 times a month to purchase food and a hot beverage. Overall, Jenkins says, about 10% of consumers eat out for breakfast once a week and it’s up to a restaurant to change the habits of these breakfast lovers to increase sales.
The market is growing more competitive as both Wendy’s and Taco Bell are now rolling out their breakfast offerings. Jenkins says the 2 ingredients for success will be marketing and coffee as these new entrants battle with McDonald’s, Subway, Dunkin’ Donuts and Starbucks. Subway is a relatively recent entrant in the breakfast market. Jenkins estimates that the company spent upwards of $50 million to grab 1.6% of the breakfast market. He emphasizes that smaller chains who have not been advertising are the ones that lost business and says, “ Marketing does work. You have to be out there all the time and persistent in getting your message through.”
Wendy’s hope to attract as much as 7% of the population to sample its breakfast fare. If it succeeds and converts these customers to steady visitors at their breakfast table, the company should be able to generate $150,000 in additional revenue per unit. Wendy’s COO, Steve Farrar recently said, “We’re going to make a long-term incremental investment in marketing for breakfast.” In addition, analysts expect Taco Bell to aim for younger consumers who are looking for spicy breakfast fare and enjoy the drive-thru convenience of these outlets.
Either way, it seems that more marketing dollars will be served up to support these breakfast initiatives. Operators of smaller chains will need to promote themselves as well in order to maintain market share.[Sources: Brandau, Mark. The keys to QSR breakfast success. Nrn.com. 26 Jan. 2012. Web 9 Feb. 2012; Brandau, Mark. Wendy’s talks new marketing. NRN.com. 30 Jan. 3023. Web. 9 Feb. 2012]