McDonald's to Finally Start All-Day Breakfast Test

Test Only in San Diego For Now

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McDonald's Egg White Delight
McDonald's Egg White Delight

McDonald's is finally going to begin testing all-day breakfast in the San Diego area.

Talk of all-day breakfast at the Golden Arches has been around for years, and last year U.S. president Mike Andres said that the company would be a "modern progressive" destination for burgers and breakfast. Now the chain will begin the test in April in some stores in San Diego, but it's too early to tell whether the test will expand beyond that.

From the Chicago Tribune:

"'We know our customers love McDonald's breakfast and they tell us they'd like to enjoy it beyond the morning hours. So next month, we will begin testing all-day breakfast at select restaurants in the San Diego area,' McDonald's said on Monday. 'We look forward to learning from this test, and it's premature to speculate on any outcomes.'"

The test will include offering some breakfast sandwiches, hasnbrowns and other products throughout the day, the Tribune said.

McDonald's has been battling a protracted sales decline, and the company is looking for new ways to bring customers in the door without slowing down operations. The chain hasn't had a positive sales quarter in the U.S. since third quarter 2013, when it posted a 0.7% increase.

This isn't actually the first time it's experimented with breakfast items outside of its usual window. In 2013, it announced it was rolling out a "McDonald's After Midnight" menu in select markets, which included Chicken McNuggets but also breakfast items like hot cakes, hash browns and the Egg McMuffin. It also tested a dedicated breakfast after midnight menu in Ohio and in Illinois.

The move comes just after Taco Bell launched its latest breakfast marketing blitz, one of the biggest campaigns Taco Bell will do this year. Taco Bell first launched breakfast nationally a year ago, and the chain's CEO Brian Niccol said that it already accounts for about 6% of its U.S. sales, but the company plans to increase that number.

Breakfast is dominated by McDonald's by a wide margin. An estimated 25% of its U.S. sales come from breakfast, and while Taco Bell will likely never match McDonald's in terms of sales, the chain can give McDonald's a run for its money. Fast food in general is a mature market, and at this point any increase in market share for one chain is at the expense of another.

Breakfast is where the opportunity is, as it's the only daypart projected to grow for the next decade. NPD estimates that fast-food breakfast will grow a cumulative 9% over the next nine years. By comparison, the industry overall is expected to grow less than a half a percent each year for the next 10 years.

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