All-day breakfast at McDonald’s will launch in Canada on Feb. 21, more than a year after it was rolled out in the U.S., boosting restaurant traffic and sales.
“It is really in response to the number one question that I’ve been asked since the United States introduced all-day breakfast — when is all-day breakfast coming to Canada?” said John Betts, president and chief executive officer, McDonald’s Restaurants of Canada Ltd.
The all-day breakfast menu will be rolled out at 1,100 locations, after testing in the GTA last year and more recently, at locations in Vancouver and Montreal.
“Really, we knew we were going to do this, we knew it had appeal, what we were testing really was the operational aspects — how do you incorporate it into the system,” said Betts.
McDonald’s move comes at the same time as burger chain A&W announced that it would be launching its all-day breakfast across Canada on Feb.27. It aims to have it at 95 per cent of its 879 restaurants by spring.
“We found that our guests were beginning to ask us to serve breakfast in the afternoon, and we decided to try it out at 40 A&W restaurants as a test in early 2016,” said Susan Senecal, president and CEO of A&W in a news release. “The response was tremendous, particularly from millennials, and we know that breakfast is something Canadians don’t limit to just the morning.”
Doug Fisher, president of the Toronto food service consultancy FHG International Inc., said McDonald’s is trying harder than ever to innovate in order to improve its financial performance.
“It’s a brilliant idea. It’s 20 years late in the making — they should have done it long ago, but it’s a great idea,” said Fisher.
“I think there will be much more (innovation) to come in the future.”
The food retailer said it is conducting a small pilot test in Florida to see whether home delivery could be viable, and is also testing an order-ahead system, using the Internet or an app.
The breakfast-in-Canada announcement arrives on the heels of the company’s full-year earnings report on Monday, and news that it is selling its restaurants in Hong Kong and China. The move is part of an ongoing effort to put more restaurants in the hands of local owners in order to encourage faster growth and boost revenues over the long term in the form of franchise income.
While global comparable sales at McDonald’s restaurants were up 2.7 per cent for the quarter and 3.8 per cent for the year, comparable sales were down 1.3 per cent for the quarter in the U.S., in part because the launch of all-day breakfast a year earlier drove up sales so much.
Comparable sales measures the increase in sales at restaurants that have been operating for more than a year.
Canada is a consistently strong performer in the global chain.
Breakfast, anchored by McDonald’s coffee and the popular Egg McMuffin combos, have been driving growth for eight to nine years in Canada, said Betts.
Betts said Canada is launching all-day breakfast after the U.S. in part because it had been in the middle of a foundational change. That change included introducing self-serve kiosks, adding new equipment for McCafé espresso offerings, introducing McCafé pastries, and hiring and training more than 6,000 employees to provide hospitality for diners, including greeting them and helping them at the kiosks.
“While we were doing that, the U.S. came along and decided to do all-day breakfast and we wanted to make sure we got the foundation of this transformational cultural change in place before we introduced all-day breakfast,” said Betts.
Up to $13,000 per location was spent to add new equipment to handle the all-day breakfast menu, including toasters and separate fresh-cracked egg cookers, apart from the grills where chicken and beef are cooked.
McDonald’s has 1,450 restaurants in Canada. The 350 locations not offering all-day breakfasts were too small to upgrade, said Betts.
Betts said all-day breakfast appeals to consumers who don’t eat beef or chicken.
The Egg McMuffin is the most popular item on the breakfast menu.
Betts said he doesn’t know whether the menu expansion might work in the other direction, with hamburgers and other lunchtime items being offered in the morning.
“Who knows? I think it will be the guest who tells us,” said Betts.
McDonald’s and A&W aren’t the first major fast-food players to offer all-day breakfasts nationwide. Starbucks Canada, for example, has offered breakfast during all its regular store hours in Canada since 2008, according to The Canadian Press.
Serving up pancakes, eggs and hash browns is a growing market in Canada, said Robert Carter, executive director of food service for market research firm NPD Group.
According to NPD data, 1.24 billion of the 6.5 billion visits to Canadian restaurants between December 2015 and November 2016 took place during breakfast. That’s an annual increase of 6.3 per cent, one that came at the expense of traffic during other meal times, especially dinner.
Canadians also ate nearly 49 million more breakfast sandwiches at quick-service restaurants for a total of 536 million, NPD said.
“When you look at where the growth in the marketplace has come from for the quick-service segment, it’s all about the breakfast day part,” said Carter, explaining that the generation born after 1980 tends to opt for a convenient breakfast to-go over making the meal at home.