Fast-Feeders Wake Up to Late-Night Potential

Expanded Hours Catering to Nocturnal Noshers Boost Same-Store Sales

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CHICAGO ( -- Leno, Letterman and Conan, watch your backs. Big Fast Food is after your audience. As the 24-hour economy pushes dinner time into what used to be bedtime, fast-food marketers are finding strong sales in the hours between dinner and breakfast, which NPD Group estimates now accounts for nearly 8% of the $160 billion fast-food industry.
Both Burger King and McDonald's have rushed into the late-night market where they are challenging Wendy's.
Both Burger King and McDonald's have rushed into the late-night market where they are challenging Wendy's.

"The notion of breakfast at 7, lunch at 12 and dinner at 6 is over," said Bob Golden, exec VP at consultant Technomic. "Our meal periods are changing and late-night dining is just a manifestation of that ... fast food is capitalizing on it."

Indeed, the sleepy hours once owned by Taco Bell and Wendy's are becoming a battleground among the nation's biggest fast-food chains. The rush by rivals McDonald's and Burger King to invade Wendy's late-night territory has been just one more nightmare for the beleaguered chain, which lost its CEO, Jack Schuessler, last week. With Wendy's same-store sales in the negative range, many observers and operators believe that Mickey D's has taken its customers.

McDonald's aggressively began expanding its operating hours in 2003 and today has 36% of its U.S. system on 24 hours, and more than 90% of its stores have some form of extended hours. The marketer aggregates the total effect to the bottom line as 1% of the same-store sales gains.

But Mike Roberts, McDonald's president-chief operating officer, said that participating stores are seeing double-digit same-sales gains. Since there aren't enough stores to subsidize national marketing, local co-ops handle the task with advertising to promotional efforts.

Taco Bell doesn't intend to be caught napping through the late-night raid. To differentiate its offering from party-crashing rivals, the chain last week recast its late-night offering as a "fourth meal" around its four taste and texture profiles known as crunchy, spicy, melted and grilled.

"It's clear competitors are moving into the space, but for us, we're really evolving our campaign," said Sheldon Duncan, senior brand manager, Taco Bell. "We are making our value proposition clear in the four tastes. We wanted to evolve our campaign and kick it into the next level."

The Yum Brands chain trademarked the nickname and backed it with a multimedia campaign including an avatar-driven Web site. Interpublic Group of Cos.' FCB, San Francisco, handles. Aimed at nocturnal 18-to-34-year-olds, along with the 40% of Americans who work the swing and graveyard shifts, ads aim to show that "everyone is a fourth-mealer."

But some believe it isn't necessarily that more Americans are eating late, but that those that do are changing where they choose to eat. "It's a movement of market share as opposed to a change of cultural behavior," said Harry Balzer, VP of NPD.
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