Price increases for breakfast items at restaurants have been only slight this year as operators work to hold on to their budget-conscious customers, according to a new study.
Intellaprice, a Boston-based foodservice consultancy, found quick-service breakfast menu prices this year are up 3 cents, or 1.3 percent, from 2009 prices. The average price for breakfast items this year was $2.84, up from $2.81 in 2009.
“The increase is modest, and reflects an effort by operators to be conservative and retain customers,” said Leslie Kerr, founder and president of Intellaprice, which surveyed about 2,300 quick-service and convenience store locations for its 2010 breakfast study.
Breakfast prices increased more between 2008 and 2009, with a 3-percent hike, which Kerr said reflected a stronger economy at the time.
“This is consistent with what was happening economically,” Kerr explained. “In early 2009, the recession was in its infancy, so operators were more aggressive in price increases. As the situation worsened, operators responded accordingly.”
Kerr said individual markets have unique economic and demographic makeups that can affect pricing. Intellaprice found that some markets showed price decreases of 0.4 percent, and others showed increases of 3 percent, more than double the overall increase in the study.
“Many operators know that pricing is not a one-size-fits-all phenomenon, and neither are price increases,” she said.
While major fast-food brands like McDonald's, Burger King and Jack in the Box have long offered breakfast, more chains are trying to break into the daypart to grow sales.
“A lot of brands are adding breakfast menus, and price is one key reason,” Kerr said. “It’s the most affordable meal to eat away from home, so this attracts consumers who are nervous about high-priced restaurant meals.”
Subway officials told Nation's Restaurant News that its national breakfast menu has increased sales systemwide since its introduction in April. The menu features egg and cheese sandwiches, with prices ranging between $1.75 and $2.25 for English muffin melts, $2 to $3.50 for 6-inch hoagies or flatbread sandwiches, and $4 to $6 for the foot-long variety.
Tasti D-Lite, a 50-unit frozen dessert chain based in Franklin, Tenn., earlier this week said it would roll out a breakfast menu systemwide after testing the items at stores in Florida, Houston, New Jersey and New York. The menu includes breakfast parfaits, baked goods and hot granola, as well as a line of hot beverages. Prices range from $1.50 for beverages to $4.44 for parfaits.
In the past 12 months through February of this year, restaurants served more than 12 billion morning meals, market research firm NPD Group reported. In addition, breakfast visits accounted for 60 percent of the growth in the restaurant industry over the last five years, presenting a significant, long-term opportunity for operators.
Succeeding at breakfast has challenges, Kerr cautioned, pointing to Wendy's, which is in the process of retooling its breakfast menu.
“While some may perceive it as easy-to-execute, this is not always the case,” she said. “Wendy’s tests and retests breakfast without rolling it out for that reason.”
“And we don’t see many casual-dining brands dipping their toes in the water," Kerr added. "This is partly because casual-dining spots often locate based on traffic patterns that may not work for breakfast. They also serve meals that are more leisurely, whereas breakfast is often a quick, on-the-go experience for consumers.”
Other findings of the 2010 breakfast study:
- Beverage prices increased 2.1 percent over.2009 levels, while food prices were flat.
- Value and combo offerings were up 0.6 percent, or 3 cents, and averaged $5.07 in 2010.
- “Healthy” breakfast offerings, averaging $1.61, decreased 1.1 percent, or 2 cents, compared with 2009 prices. These items include snacks and value menu items, which explains the lower price point.
Contact Ron Ruggless at [email protected]