New 'McKitchen' Could Mean All-Day Breakfast
New York, Sept. 21, 2006 — -- If you've ever had a craving for a bite of breakfast after 10 o'clock in the morning, you know a common frustration of millions of people around the world.
Fast food restaurants typically shut down their eggs-n-bacon operations in the late-morning hours to get the kitchens geared-up for lunch items.
But thanks to a new restaurant design the days of the breakfast cutoff might be coming to an end sometime soon at a McDonald's near you.
McD's CEO Jim Skinner announced at an investment conference in San Francisco that the world's leading fast food chain will be rolling out new restaurants soon where breakfast items could be featured all day.
"It's not compatible with our current operating system," Skinner said about offering its breakfast menu all day. "But with this system, that could be possible."
The new design features a kitchen capable of whipping up Egg McMuffins and Big Macs at the same time. It's an idea that some industry watchers think might be popular with patrons
"Breakfast has been a major area of opportunity for them in the past few years with the successful introduction of McGriddles and their new premium coffees," said Tim Allen, an analyst with Jefferies & Co.
Recent financial disclosures show that breakfast runs make up 25% of the sales at McDonald's 31,800 restaurants across the globe. A recent push to introduce upscale coffees to compete with Starbuck's has helped turn around same-store sales results, which had been lagging.
"The McDonald's brand is really best known for its breakfast offerings," said Jack Russo, an analyst at AG Edwards. "That morning menu offers the highest profit margins, so it makes sense that they might be looking to push sales of those items."
During the presentation, McDonald's CFO Matthew Paull said the numbers show breakfast is the chains "strongest performer" and has show "extremely strong" performance even after two to three years of growth.
But giving customers an option for eggs late in the day could squeeze some cash out of an operation that's already running on thin margins.
"It's a change that could tax their kitchen staff, and that could be bad for the bottom line," said Russo. "Right now they have a 100 percent turnover in staff every year, so training people to deal with more than one menu at a time has the potential to increase costs."
A McDonald's spokesman, when asked to comment on the new kitchen design, said the chain would not commit to a timetable on when the new kitchens would be in place and all-day breakfast service would be available to customers.
Analysts say if it's like other McDonald's innovations the concept is likely to be rolled out slowly, built into the 500 or so new restaurants the chain will builds each year.
But no matter where you live you'll likely see new morning offerings from the burger chain soon. Analysts say McDonald's will likely spend millions promoting new flavored coffees and espresso drinks in the next year.