McDonald’s CEO: No heat from breakfast competition

NEW YORK — McDonald’s apparently isn’t scared by a waffle taco.

Without specifying names, McDonald’s CEO Don Thompson said during a conference call Tuesday that the company hasn’t seen any impact from the “most recent competitor” in the breakfast space. In apparent references to Subway and Taco Bell, he also noted that McDonald’s seems to face new rivals every year in the mornings, whether they’re “sandwich shops or taco shops.”

The comments come after Taco Bell’s launch of its national breakfast menu late last month, which generated considerable fanfare because of the chain’s TV ads featuring real-life Ronald McDonalds professing love for items like its waffle taco. But Taco Bell’s lineup is still fairly limited compared with McDonald’s, and it’s not clear whether it will be able to convince people to visit its restaurants in the mornings.

Taco Bell, which is owned by Yum Brands, has declined to say how its breakfast is faring so far. In a phone interview, the chain’s chief marketing officer, Chris Brandt, didn’t have much to say about the comments by McDonald’s.

“Well, good for them,” Brandt said.

McDonald’s, which has been in the breakfast business for about 30 years, counts on items like the Egg McMuffin and Sausage Biscuit to generate 25 percent of its U.S. sales. The company, based in Oak Brook, Ill., has more than 14,000 U.S. locations, compared with around 6,000 for Taco Bell.

During the earnings call Tuesday, Thompson also seemed to draw a distinction between McDonald’s breakfast and its unnamed rivals, noting that McDonald’s cooks its food on site.

“We crack fresh eggs, we grill sausage and bacon, we bake biscuits and we toast muffins,” Thompson said.

Later, he emphasized the point that McDonald’s actually cooks fresh eggs in its restaurants, explaining that “It isn’t a microwave deal.”

Taco Bell has said it uses frozen eggs that are thawed and cooked in the mornings. Although McDonald’s cooks eggs to order for some breakfast sandwiches, it also uses frozen products in some cases. But the company has been trying to focus on improving its image as a chain that serves quality food, emphasizing words such as “restaurant” and “kitchen” in describing itself.

In the meantime, McDonald’s plans to intensify marketing around its breakfast, with a focus on its coffee. Although traditional fast-food chains are struggling to boost sales, breakfast has remained a growing category in the industry and McDonald’s is apparently determined to defend its leading position.

For the first quarter, McDonald’s said its sales at established U.S. locations fell 1.7 percent. Global sales edged up 0.5 percent as gains in Europe offset the domestic decline.

Talk to us

More in Herald Business Journal

Tourism takes a vacation, and many businesses are hurting

With people staying home, do you scale back activities and events — or do you close?

Everett startup makes a swift pivot from in-person to online

Abacus links hobbyists, crafters and artists with people who want to learn new skills — virtually.

Everett’s new equity manager is ready to roll up her sleeves

In her new job, Kay Barnes will work to ensure that the city’s staff reflects Everett’s diversity.

Dining in the street is now an official thing in Everett

With a free permit, businesses can expand outdoor seating to street parking areas — and fencing is provided.

FAA: Boeing pressured safety workers at S.C. aircraft plant

Federal officials are seeking to fine Boeing $1.25 million for practices related to 787 inspection oversight.

Pop into this Everett pop-up store for new vinyl records

Upper Left Records will offer albums from local bands and new pressings of classic recordings.

COVID and road closures have hampered Rucker Ave. businesses

The streetscape looks better, but pedestrian traffic hasn’t returned.

FAA spells out design changes needed in grounded 737 Max

The public will now get 45 days to comment, after which the FAA is expected to publish a final rule.

Microsoft tries to salvage deal to buy TikTok, appease Trump

The president had floated plans for an outright ban of the app on national security grounds.

Most Read