You've got to get up pretty early in the morning to compete in the cutthroat fast-food market.
Yum! Brands (NYSE:YUM) realizes as much, now that it's promising a push into breakfast as part of the strategy to awaken slumping domestic sales at its quick-service empire, which includes Taco Bell, KFC, and Pizza Hut.
The entire game plan is ripped from the McDonald's (NYSE:MCD) playbook. The company is going for the same approach across the board, in which marked-down value menu items are offset by premium-priced, more healthful fare. Yum! Brands is also copying the burger star's push into wider beverage choices.
However, it's the breakfast push that appears to be mission-critical here. Think about it. McDonald's, Hardee's, Sonic (NASDAQ:SONC), and Wendy's (NYSE:WEN) -- a recent addition to the early risers' club -- are all pushing premium breakfast burritos. How can doing that not affect Taco Bell? If you wolfed down a sausage, egg, and potato burrito at Mickey D's in the morning, are you really going to head out for a beef burrito supreme for lunch? Even though burrito-rolling darling Chipotle (NYSE:CMG) hasn't had a problem producing double-digit comps gains, a blander mainstream player like Taco Bell is clearly susceptible.
Taco Bell's marketing campaign revolves around the "fourth meal" philosophy, but how can it have neglected the first meal for so long? Sure, most Taco Bell locations are open early enough to grab lunch staples for a late breakfast, but the push for a dedicated breakfast menu is long overdue.
You can already get chicken biscuit sandwiches at Wendy's and Chick-fil-A, so how big of a stretch is it for KFC to follow suit nationally? Pizza Hut? Well, that's a trickier sell, though it's a shame to see the pizza ovens stay cold in the morning.
Breakfast is becoming an integral part of the fast food industry's renaissance on this side of the Supersize Me fallout. Even some nontraditional players are jumping into the skillet. Starbucks (NASDAQ:SBUX) has been testing warm breakfast items, and smoothie giant Jamba (NASDAQ:JMBA) is rolling out granola-topped smoothies.
It's about time for Yum! to serve something up for the morning commuters. Now let's see how Taco Bell rolls at the crack of dawn.
