News

Quiznos adds breakfast in c-store operations

March 14, 2010

In an effort to target a new category of consumers and boost its convenience-store offerings, Quiznos has started to roll out several new breakfast items, available only at 175 c-store locations.

The items include a giant cinnamon role, Country Sausage and Egg Biscuit, Breakfast Sammies and Breakfast Subs, all for a cost of less than $5.

Shultz Hartgrove, Quiznos senior vice president of convenience development, said the company began to look at its c-store platform six months ago in an effort to grow the category for its partners.

That review process included an analysis of what concepts such as McDonald's and Starbucks were doing in the daypart, as well as discussions with current and prospective franchise partners.

During that process, executives learned there seemed to be a void in the breakfast daypart offering at the c-store locations where they operate. And with about 35 percent of c-store transactions being conducted during morning times, there was more than enough opportunity for growth.

"We took the same approach for our breakfast program as we have for lunch," he said. "We developed the breakfast Sammies and are able to deliver that hot and toasty breakfast sandwich and hearty breakfast in handheld value. In terms of platform, we can integrate (breakfast) with Quiznos operations pretty easily."

The breakfast launch coincides with the company's switch to eco-friendly packaging that includes compostable salad bowls, cups and sandwich packaging.

"So, it was a pretty big leap forward to go green â€¦ without adding cost to the system," Hartgrove said.

The company also is considering a move to add the breakfast daypart at stand alone locations where it makes sense, such as in high pedestrian areas. "But we're not going to force franchisees to roll out breakfast when they don't have the customers (to support it)," he said.

Consumer breakfast shift

The move comes as consumers are backing off their purchase of away-from-home breakfast items. A newly released study by Mintel Menu Insights reports that 460 breakfast items were introduced on menus last year; however, half of consumers surveyed in November 2009 said they're spending less on restaurant breakfasts compared to 2008.

Another 47 percent of consumers surveyed said they don't eat breakfast out during the week, and 45 percent said they don't eat breakfast out on the weekend.

"We see an increasingly competitive market for restaurant breakfast, even though sales have declined," said Eric Giandelone, director of research, Mintel Foodservice. "Restaurants are refreshing their breakfast menus, but I believe reduced consumer spending, as well as relatively high unemployment, will limit sales growth over the next year."

While restaurant breakfast and brunch sales fell 3.4 percent from 2007 to 2009, the category is expected to expand by 13 percent from 2009 to 2014.

"To overcome contracting sales, restaurant operators need to be keenly aware of what drives people into restaurants for breakfast," Giandelone said. For example, Mintel found people are mostly looking for low prices and convenience on weekdays, while food quality and menu variety are more important to weekend breakfast diners.

With 35 percent of c-store transactions taking place during the morning commute, Hartgrove said Quiznos' breakfast offering should consolidate drivers' time as they can get gas and pick up a high-quality breakfast sandwich all at the same place. And it also will be up to the franchise to determine if they want to make the breakfast menu a 24-hour platform.

"We've seen a lot of consolidation in the c-store industry over the last several years, and now there is a movement to upgrade existing sites and locations," Hartgrove said. "But (operators) also see that everything they carry in their store is a commodity. And so they're looking at branded QSR and foodservice in general as a way to continue to capture that consumer dollar."