McDonald's Sets Alarm for 5:00 a.m.

Encourages earlier opening for breakfast rush

LAS VEGAS -- McDonald's Corp. wants all its U.S. restaurants to open by 5 a.m., up from 75% today, as Americans increasingly buy breakfast earlier, part of a broader plan to increase average annual sales at McDonald's outlets by $400,000, to an average of about $2.4 million per U.S. location, by 2009, said The Wall Street Journal.

At a conference for 16,000 of its restaurant managers in late July, top executives at the world's largest restaurant chain urged the managers to treat the period between 5 a.m. and 7 a.m. the same way they handle the lunchtime [image-nocss] rush.

The beginning of the breakfast rush, which used to fall between 6 a.m. and 7 a.m., has moved up an hour, in part because Americans are driving to work earlier, said Don Thompson, president of McDonald's USA, according to the report. There's also been a general blurring of the times when Americans eat meals.

I'm amazed at the people who work for me who take their kids to hockey at 4 a.m. and 5 a.m., Janice Fields, COO for McDonald's USA, said at the event. I want us to be open when they need us.

At one of franchisee Susan Singleton's restaurants in suburban Chicago, customers are already waiting outside when workers open the doors at 5 a.m., the report said.

The move comes as McDonald's largest competitors are moving more aggressively into breakfast, the Journal added. Starbucks is adding warm breakfast sandwiches to more of its coffee shops. Wendy's plans to add breakfast at thousands of its locations and Burger King started a low-priced breakfast menu earlier this year.

Fields said McDonald's increased emphasis on breakfast is not reactionary to the competition. McDonald's executives said that breakfast has the most growth potential of any daypart. To cash in on that, the company is looking at adding new fruit and grain items, such as oatmeal, to its breakfast menu, Thompson said. Since January, McDonald's has been reorganizing how it positions workers and uses equipment in the morning to make lines move more quickly, said the report.

About 75% of McDonald's nearly 14,000 U.S. restaurants already open by 5 a.m. While some restaurants won't be able to open that earlythose in a shopping mall, for instanceMcDonald's wants all the locations that can to open by 5 a.m.

Executives used the three-day gathering, the largest McDonald's event in the company's history, to reinforce the chain's top initiatives, said the reportincreasing the breakfast business; expanding its beverage offering, including sodas, coffees and other drinks; selling more chicken; and focusing on convenienceas well as motivating managers to aspire to higher posts at the fast-food chain. One major theme: A significant number of McDonald's executives once worked as managers, and attendees should aim to rise through the ranks.

Also at the conference, McDonald's executives told managers they're moving closer to serving lattes and cappuccinos in all the company's U.S. locations. McDonald's already sells the drinks in about 700 restaurants, including all its restaurants in Michigan and some in California, New York and North Carolina, said the Journal. The fast feeder said the line of drinks is driving more new customers to restaurants than any product before it, and that customers say it improves their perception of the McDonald's brand.

Total coffee sales at McDonald's U.S. restaurants have grown 34% during the past year, Thompson said. Iced mocha has been its best-selling espresso drink.

McDonald's has worked with coffee suppliers for the past two and a half years to create its own espresso blend using beans from Central and South America, as well as the mountainous regions of Indonesia.

The company is also developing a one-step machine for the drinks: It grinds the beans and steams the milk in one process, triggered by the touch of a button, the report said.

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