- McDonald's is temporarily pulling its all-day breakfast menu and limiting items to its most popular ones to streamline operations as the novel coronavirus crisis squeezes its business, according to CNBC. Bill Garrett, SVP of McDonald's U.S. operations, said in a statement that the chain will regularly evaluate performance and try to move back to its regular breakfast menu as soon as possible.
- "To simplify operations in our kitchens and for our crew, and ensure the best possible experience for our customers, we are working with our franchisees and local restaurants to focus on serving our most popular choices and will begin temporarily removing some items from the menu over the next few weeks," Garrett said.
- COVID-19 could have a "material" negative financial impact on McDonald's business since "substantially all" U.S. McDonald's locations are operating with only drive-thru, pickup and delivery options, and some restaurants have limited hours, McDonald's said in a regulatory filing Wednesday.
Simplifying operations is a savvy way for McDonald's to protect its profitability amid state and municipal mandates to limit restaurant business. But altering its all-day breakfast menu, which the chain launched in 2015 and has been a major growth driver for the restaurant over those five years, is significant.
"We are working with our franchisees and local restaurants to focus on serving our most popular choices and will begin temporarily removing some items from the menu over the next few weeks," Garret said.
Just a few weeks ago, reducing its breakfast menu would have been unthinkable. Before the spread of COVID-19 in the United States, 2020 was shaping up to be the year of the breakfast wars. QSRs were already heavily investing in their morning menus because breakfast was the only growing restaurant daypart, but Wendy's much-anticipated breakfast launch March 2 ramped up the frenzy.
McDonald's added Chicken McGriddles and McChicken biscuits to its breakfast menu at the end of January to capture growing consumer demand for chicken sandwiches and better compete with Chick-fil-A's growing popularity, for example.
The chain's breakfast strategy wasn't without its problems, however. Last summer, the chain gave franchisees the ability to select which items they wanted to include on the all-day menu and during what hours in a bid to shave down its drive-thru times and boost operator profits. But this of course wasn't as drastic of a change as temporarily phasing out its all-day breakfast menu altogether.
It will be interesting to see how this decision will impact McDonald's financials, and if competitors will have to pare down their own morning offerings to stay afloat during this time. Breakfast promotions gave QSR traffic a 4% boost in the first week of March, the biggest gain for the QSR segment in four weeks, despite growing instability from coronavirus. But even though growing diner interest in breakfast delivery could help QSRs maintain sales in the interim, it's unclear whether breakfast will be the cash cow restaurants were hoping for amid COVID-19's spread.