It’s often said that breakfast is the most important meal of the day, but many customers are opting to skip the early meal – at least at some of the top fast food retailers in the country.
During earnings calls last week, both McDonald’s and Wendy’s each reported slow breakfast sales. Both companies attributed the drop to economic anxiety and uncertainty, especially among lower-income guests.
“There is a lot of anxiety and unease with that low-income consumer,” said McDonald’s CEO Christopher Kempczinski.
“So real incomes are down with the low-income consumer, that absolutely is going to put pressure on visits into the industry. Second thing is there is a lot of anxiety and unease with that low-income consumer. I think we could all speculate the reasons for that, probably tariffs and the impact that, that might have, questions around employment situation.”
Kempczinski says that the trend of lower sales is industry wide, with breakfast offerings taking the largest hit as customers exhibit more frugality.
According to Wendy’s interim CEO Ken Cook, breakfast is often the first meal to go when customers are deciding where to make cuts.
“When consumer uncertainty increases and consumers choose to eat another meal at home, breakfast is often the first place that they do that with,” he said during the company’s earnings call.
The change comes after many restaurants made changes to their breakfast menus over recent years, directly responding to customer demand. Wendy’s boasts 20 items on its breakfast menu, 10 of which contain eggs. Starbucks has expanded its breakfast menu to a total of 12 items after debuting egg bites in 2017.
The business decline isn’t exclusive to fast food retailers. Dine Brands CEO John Peyton, whose company owns fast casual chains like Applebee’s and IHOP, sees concerning trends in those businesses as well.
Peyton mentioned to CNBC last year that the economic uncertainty and rising costs of certain items has led to a drop in customer visits.
Inflation, higher costs and a heavier toll on consumers aren’t expected to go away any time soon, meaning that even fewer customers could choose to eat breakfast at some fast food restaurants and chains.
