McDonald's Is Counting On This Item To Win The Breakfast Wars

No other chain has something like the McGriddle, McDonald's pancake/muffin hybrid, which likely is why the chain has followed the coffee giveaway that ended yesterday with a new marketing push for McGriddle sandwiches.

This, much more than free coffee, is McDonald's response not only to Taco Bell's entry into the breakfast market but also to all the other competitive activity in the mornings. If menu innovation is going to be key to the competition, McDonald's gladly will put McGriddles up against Taco Bell's Waffle Taco and A.M. Crunchwrap. Who wins? McDonald's average per-store sales are $1 million+ higher than the average Taco Bell's.

McDonald's isn't moving away entirely from its McCafé coffee. New TV advertising positions McGriddles as integral to the way some people take their coffee. Online promotion includes a site showcasing a series of life situations for which "Once you get a McGriddles, you'll get it" is the recurring tagline.

Interestingly, creation of McGriddles in 2003 is credited to then-SVP of Menu Management Tom Ryan. He since has founded McDonald's fast-casual competitor Smashburger.

Americans made 12.5 billion restaurant visits for breakfast last year, making the morning meal theonly daypart showing traffic growth for the third consecutive year, according to NPD Group data. Breakfast visits were up 3% while traffic for both lunch and dinner declined by 1%. Breakfast accounts for 21% of customer visits, according to NPD. In terms of sales, breakfast can be even more significant, accounting for 25% (as at McDonald's) or more. In the restaurant business's slow-growth marketplace, those numbers mean breakfast is the time when gains in traffic and sales can be made, if at no other time.

That's why there has been a flurry of new breakfast items. They haven't come just to counter Taco Bell's overanalyzed breakfast menu; more importantly they're intended to increase share in what is now the most important daypart. Jack in the Box (which offers breakfast all day) last week added new Breakfast Melt sandwiches; Whataburger has added jalapeno-spiked biscuits; Starbucks has a new line of upscale sandwiches.