Burger King Cooks Up Breakfast Menu to Compete with McDonald’s

by Jeff Reeves | September 7, 2010 11:26 am

Wall Street was abuzz last week with the news that Burger King Holdings (NYSE: BKC[1]) is being purchased by private equity firm 3G Capital for a cool $3.2 billion. Now Main Street gets is serving of Burger King business news – this time with a sweeping plan at the Home of the Whopper to reinvent its breakfast menu. The overhaul includes nine new items from blueberry biscuits to a cibatta breakfast sandwich.

Here’s a rundown of some of the new morning menu highlights:

It’s conspicuous that this menu reformulation comes amid a buyout. That’s because breakfast sales are a measly 12% of total BK revenue – compared to McDonald’s, which pulls in about 25% of its sales first thing in the morning. Clearly there is room to grow, and making a push for breakfast sales makes good business sense for Burger King.

The rollout will be making a splash with six new television ads highlighting the menu overhaul – and that lovable masked pitchman, The King. So expect to keep hearing about these offerings in the coming weeks.

Whether the gambit will pay off for BK is not a sure thing. Breakfast is the easiest meal to cut out of your day, and many families have cut back to just coffee or juice to get going in the morning. That means trouble for all restaurants, not just Burger King. What’s more, high unemployment and economic uncertainty has been weighing on all restaurants as consumers eat at home more. While some of BK’s new menu items are value-conscious, others like the breakfast platters are not.

But the bottom line is that something has to give for BK. And that something is clearly breakfast.

But Crossan’Wich fans have no fear. That tasty treat will remain a part of the new Burger King breakfast menu, like always.

As of this writing, Jeff Reeves did not own a position in any of the stocks named here.

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Endnotes:
  1. BKC: http://studio-5.financialcontent.com/investplace/quote?Symbol=BKC
  2. MCD: http://studio-5.financialcontent.com/investplace/quote?Symbol=MCD
  3. SBUX: http://studio-5.financialcontent.com/investplace/quote?Symbol=SBUX
  4. Download your FREE copy of Hilary Kramer’s new report here.: http://investorplace.com/order/?sid=NA4110

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