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    At QSRs, Early Birds Are Rising

    New NPD data shows that over the past year, the morning meal has posted the biggest gains of any daypart.

    Quick-service restaurants (QSR) are waking up to positive morning traffic counts as consumers increasingly seek quick morning meals on the go, according to new data from The NPD Group reported in Nation's Restaurant News.

    "Breakfast has been one of the strongest-performing dayparts in the industry, especially for QSR," said Bonnie Riggs, an industry analyst with the Port Washington, N.Y.-based global market research firm.

    The QSR morning meal, which NPD defines as breakfast, morning snack and brunch, showed the biggest gains of any daypart during the past year, data shows. For the three-month period that ended February 2006, morning meal traffic was up 8 percent over the same period the prior year. QSR lunch saw traffic gains of 2 percent, while supper traffic remained flat. According to the data, QSR morning-meal traffic and check sizes have also steadily increased during the past four years.

    Along with increases in visit volume, gains in QSR breakfast also reflect the continued breakfast migration from full-service restaurants, the report said. Quick-service restaurants commanded 82 percent of all breakfast visits for the year that ended March 2006. Midscale restaurants, including buffets and family restaurants, accounted for 16 percent. Casual restaurants make up the remaining 2 percent.

    "Full-service is losing to QSR," Riggs told Nation's Restaurant News. "We just don't have time for those full, sit-down meals. We're taking food out because we are doing things on the run."

    The trend also reflects increased focus on breakfast by QSR leaders, with new product rollouts and the entry of new players into the daypart. "I think both things are happening because people realize that it's a growth opportunity," Riggs said.

    QSR hamburger units still dominate the mornings claiming 29 percent of QSR traffic during that daypart. But doughnut stores like Dunkin' Donuts which currently eat up 18 percent of traffic and gourmet coffee/tea shops like Starbucks which get 11 percent, are top drivers of traffic growth at QSR breakfast, NPD said.

    Dunkin' Donuts is testing personal breakfast pizzas at a new prototype store. Other morning meal products at the prototype store include smoothies made from yogurt and fruit, and "breakfast bites" -- eggs wrapped in flaky dough -- available in three varieties. Earlier this year, the brand launched its Supreme Omelet Sandwich.

    Starbucks Corp. is testing hot breakfast sandwiches at Starbucks Coffee units in several cities in an effort to meet its stated goal of rolling out the program to 600 stores by year-end, said Jim Donald, president and chief executive of Starbucks. Early results indicate "strong customer acceptance" of the sandwiches in such markets as San Francisco and Portland, Ore., Donald told Nation’s Restaurant News. The sandwiches were just launched in Chicago, where they sell for $2.95.

    The hamburger category likely will get a boost from Wendy's planned re-entry into the breakfast daypart after two decades of absence, the report said.

    Wendy's already is testing breakfast in some markets and has said that the national rollout would follow in 2007. Among the products being tested are breakfast sandwiches, hash browns, yogurt, blueberry muffins and mandarin oranges, as well as Millstone-branded coffee. Wendy's has projected that breakfast could add $160,000 to its average restaurant's annual sales within three years.

    McDonald's recently tested Cinnamon Melts -- a product the company described as the center of a cinnamon roll -- at participating locations in Michigan, and rolled out a premium roast coffee in February.

    Burger King recently rolled out two new breakfast items as limited-time offers. Burger King's French Toast Sandwich, priced at $2.19, is made with two slices of cinnamon- and maple-flavored bread containing a folded omelet, American cheese and a choice of ham, sausage or bacon. The brand's Cheesy Tots, priced from $1.29 to $1.79, are crispy potato products filled with melted mozzarella and cheddar cheeses.

    Other findings from the NPD data included:

    -- The number of people going out to breakfast -- called daily penetration -- was up "considerably" in the year that ended March 2006, Riggs said. "A year ago it was about 9 percent of the population that was visiting a restaurant for breakfast daily," she said. "It's now 10 percent. And when you consider the size of the base, that's a pretty big shift."

    -- Several demographic groups contributed to breakfast traffic growth. The heaviest users of QSR breakfast are adults ages 25 to 49 years old, NPD said. Visits from that age group make up about half of all morning meal traffic.

    -- Breakfast sandwiches and coffee make up the largest number of servings during the morning daypart, according to NPD. The top growing foods include bagel sandwiches, breakfast burritos, pancakes and French toast on a stick, Riggs said.

    -- Specialty coffee led in servings growth for the year that ended March 2006. Specialty coffee was followed by milk, diet sodas, iced tea and bottled water.

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