Burger King Banks on Brunch – MCD, BKC, JACK, WEN, YUM, DENN

   
Burger King Banks on Brunch – MCD, BKC, JACK, WEN, YUM, DENN

Burger King (BKC) has is turning up the heat in its war with McDonalds (MCD) for early morning sales. In selected markets, BK is advertising the availability of a “Burger King brunch” in a quest to cash in on the lucrative breakfast market. This is only a few months after announcing Burger King will carry coffee made by Starbucks  as early as September to provide a more flavorful alternative to its BK Joe coffee.

McDonald’s has always been the king of fast food breakfast. But in recent years it has kicked it up a notch with its recent McCafe coffee offerings and strong sales at international McDonald’s restaurants, and the fast-food chain has made breakfast a big money maker. That has made Burger King and other chains rethink their own menus in a quest to share in the early morning sales surge.

Subway most recently joined the fun, introducing its first breakfast menu. Jack in the Box (JACK) upgraded its morning menu a few weeks back with the introduction of a Grilled Breakfast Sandwich.  CKE Restaurants (CKR) just recently added a double Loaded Biscuit ‘N’ Gravy with egg and sausage to the morning menu at its Hardee’s restaurants. Even breakfast stalwart Denny’s (DENN) appears to be looking to hang on to sales and dip into bigger profits with a Denny’s value menu featuring items like all-you-can-eat pancakes for just $2.

Ronald McDonald isn’t exactly shaking in his big red shoes just yet. MCD remains the industry leader, and ranks #8 among the Dow’s top dividend stocks. And while rivals are trying to emulate it success by rolling out their own versions of successful McDonald’s strategies, they have yet to erode the company’s dominant position.

Take Wendy’s/Arby’s Group (WEN). Arby’s just got around to launching a value menu this year, when the biggest flop in its same-store sales has already occurred. With Arby’s seeing revenue at its U.S. locations drop double digits, McDonald’s doesn’t exactly have to start sweating just yet. Or take Yum! Brands (YUM), which saw huge success with Taco Bell’s Potato and Paneer Burrito in India. Despite the offering being a big hit on the Subcontinent, there’s only one Taco Bell location in the entire region since YUM has been slower to expand there.

Maybe Burger King’s move is just another weak attempt to try to outdo McDonald’s. But maybe not. You have to admit that the menu is worth a look. BK’s mimosa is nonalcoholic with OJ and Sprite instead of orange juice and champagne, but should still provide a fizzy pick-me-up in the morning. Its other new brunch item is a new BK Ciabatta Breakfast Sandwich that consists of scrambled egg, cheese, tomato, ham and bacon with a special smoky tomato sauce. The menu will debut in test markets include Massachusetts, Florida and parts of Canada

The final element of the brunch menu? BK’s signature Whopper available first thing in the morning.

Hey, if pizza has become a breakfast staple … why not burgers?

Tell us what you think here.

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Article printed from InvestorPlace Media, http://investorplace.com/2010/04/burger-king-brunch-bkc-stock-mcdonalds-mcd-jack-yum-denn/.

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