The breakfast battle ground

The most important meal of the day has become a “war zone” for SA’s food chains as tough economic times and rising costs bite into consumers’ disposable income.

“Breakfast is a war zone,” Kevin Hedderwick, the chief executive of Famous Brands, said at the release of the company’s annual results last month. But he added recently that Wimpy was sticking to its core offering of great breakfasts at reasonable prices.

Wimpy’s recent innovations include the Classic Brekkie Bun for R20, a price point where a lot of the competitor activity is happening. More recently it has introduced the all day Cheese Griller Kebab Breakfast for R29.90.

Hedderwick said: “We are not going to allow Wimpy to get into a price war. Breakfast is Wimpy’s high ground.”

But that high ground, notes a Business Report article, may be getting hard to hang onto as those already in this category are cutting prices, and burger joints and pizza parlours have extended operating hours and menus to offer breakfast.

Pierre van Tonder, the chief executive of Spur Corporation, said the profile of Spur’s breakfast offering was boosted about a year ago and it had proved to be a “very profitable contributor to the business and has generated volumes”.

In its interim results announcement in March, the company said the Spur brand continued to gain share of the highly competitive breakfast market with the Unreal Breakfast campaign – two eggs, two rashers of bacon, fried tomato, chips and two slices of toast for R19.95 – bolstering breakfast trade to 8 percent of total Spur sales.

Van Tonder said certain opposition, which he declined to name, “were not happy that we entered the breakfast category, but it is working for us and our customers”.

Spur Corporation’s Panerottis Pizza Pasta brand is also now offering a breakfast pizza.

Another new entrant to breakfast is KFC, which opened outlets last year from 6am to offer breakfast until 10.30am with items such as French toast fingers, oats and muesli and items with fresh eggs. Breakfast meals range from R9.90 to R22.90, with an average of R14.90. It also offers a R5 cappucino during breakfast hours.

Dave Timm, the chief marketing officer of KFC South Africa, said breakfast had been great for business and had also offered a greater return on investment for franchisees.

“We are seeing growth in breakfast month by month.”

McDonald’s, a traditional burger business, was ahead of the curve offering breakfast for the last four years. Greg Solomon, the MD of McDonald’s South Africa, said breakfast was a significant extension to the burger business and contributed 11.5 percent to total revenue. Breakfast at McDonald’s includes, among other items, the Sausage McMuffin with egg, the Mega McMuffin, as well as premium arabica bean coffee.

Solomon said the breakfast segment was getting a lot more interest from the quick service restaurant market, but McDonald’s was enjoying double-digit growth in this category.

But it is not only the big players that are fighting it out for a share of breakfast…

Business Report: Read the full report