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Starbucks Heats Up Breakfast

By Rick Munarriz - Updated Nov 15, 2016 at 5:42PM

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The coffee king wants to feed your king-sized appetite.

If Squeeze's Black Coffee in Bed isn't enough to win you over, maybe a hearty breakfast sandwich will fill those morning hunger pangs.

According to a Dow Jones story, Starbucks (NASDAQ:SBUX) is in the process of installing speedy TurboChef (NASDAQ:OVEN) ovens in 200 New York City locations.

In and of itself, this may not mean much to a company like TurboChef, which has already shipped out more than 20,000 ovens to Subway eateries after its introduction of toasted subs to compete with Quizno's.

Even for Starbucks, this isn't necessarily a slam-dunk move, because the chain is perpetually crowded during the morning. If that complicated bacon-and-gruyere-cheese blueberry bagel order slows down the barista, hurried patrons may bolt empty-handed.

Knowing all this, it's still the right move for Starbucks. It's a good way to protect its turf, even if rival Dunkin' Donuts has been serving toasted breakfast sandwiches for years without denting morning business at Starbucks.

The real battle here for Starbucks is actually looming from the old-school fast-food chains. McDonald's (NYSE:MCD) and Burger King (NYSE:BKC) have been upgrading their java brews to go along with their warm morning eats. That may not smell like much of a threat, but Wendy's (NYSE:WEN) will be rolling out a breakfast menu next year, too.

With so many places begging for your early morning dollar, it's a sound strategy for Starbucks to broaden its offerings.

These ovens may also come in handy later in the day, when Starbucks isn't as crowded, if more conventional mealtime sandwiches make it on the menu. PaneraBread (NASDAQ:PNRA) has nothing to worry about just yet, but keep an eye on this next summer, when Starbucks determines whether this is a concept worth expanding.

2007 is shaping up to be a breakfast battle to end all breakfast battles.

Here's more Foolishness about the ubiquitous Starbucks:

Starbucks is an active recommendation for readers of the Motley Fool Stock Advisor newsletter service. Find more great picks from Tom and David Gardner with a free 30-day trial subscription.

Longtime Fool contributor Rick Munarriz can actually walk to two Starbucks from his home, but he's still not much of a coffee-sipper. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Starbucks Corporation Stock Quote
Starbucks Corporation
SBUX
$111.24 (-0.16%) $0.18
McDonald's Corporation Stock Quote
McDonald's Corporation
MCD
$249.33 (0.21%) $0.53
Panera Bread Company Stock Quote
Panera Bread Company
PNRA
The Wendy's Company Stock Quote
The Wendy's Company
WEN
$21.16 (0.47%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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