January 26, 2012
Taco Bell, the Mexican-style fast-food chain that's best remembered for a 1990s ad in which a Chihuahua proclaimed "I want Taco Bell" in Spanish, introduced a breakfast menu Thursday at nearly 800 restaurants in 14 states.
If the launch goes well, Taco Bell plans to begin selling breakfast burritos and hash browns along with its tacos and gorditas in its 5,600 locations nationwide by 2014.
Taco Bell is entering the mad scramble by fast-food heavyweights to compete for the morning on-the-go crowd. Breakfast has become the most important meal of the day for restaurants, accounting for virtually all of the industry's growth in the past five years.
"Right now we're not getting our fair share of that," said Brian Niccol, Taco Bell's chief marketing and innovation officer. "We want to get our fair share and then some."
Breakfast's new popularity has a lot to do with the economy. When people are out of work, they don't dine out much. Lunch sales, in particular, fall because people aren't grabbing a bite to eat during the workday. And at a time when Americans are cutting back on discretionary spending, it's cheaper to buy breakfast at a restaurant than to pay for dinner out.
Fast-food restaurants are clamoring to take advantage of the growing demand. Subway started offering breakfast in 2010. Wendy's is starting to get into the breakfast game, too. And Burger King, Starbucks and McDonald's in recent years have been expanding their offerings of everything from breakfast sandwiches to oatmeal and smoothies.
For its part, Taco Bell is teaming with such popular brands as Johnsonville, Cinnabon, Tropicana and Seattle's Best for its breakfast menu items that range in price from 99 cents to $2.79. The menu includes burritos stuffed with eggs and either sausage, bacon or steak; sausage and egg wraps; hash browns; hot or iced coffee; and orange juice.
Customers can buy the breakfast items in Taco Bell locations in Alaska, Washington, Oregon, California, Arizona, Idaho, Montana, Utah, New Mexico, Nevada and Colorado. A limited number of stores in Texas, Ohio and Oklahoma also will have the breakfast menu.
Some Taco Bell restaurants already are open around the clock to accommodate the new breakfast offerings. Others will open at least one hour earlier, which means an 8 a.m. or 9 a.m. opening for many. The stores will stop serving breakfast at 11 a.m.
That's a later start time than most other fast-food chains offering breakfast have. But it's a reflection of Taco Bell's core customers -- 18- to 20-somethings who generally aren't up at the crack of dawn.
"What we found is, they're not the customer that shows up at 6 a.m. for breakfast," Niccol said. "We can get those guys on board, they become the evangelists, and then we can start adding additional hours for people that want breakfast at 6 a.m. or 7 a.m."
The new breakfast menu and operating hours come a year after Taco Bell faced a short-lived lawsuit claiming that its seasoned beef filling did not have enough beef to be billed as such. Taco Bell said the claim was false and spent millions in advertising to defend its taco filling and shore up its image.
The suit was dropped about three months after it was filed by an Alabama-based law firm, but Taco Bell still has struggled to regain momentum after the bad publicity.
Revenue at Taco Bell restaurants in the U.S. open at least a year -- an indicator of a restaurant's health -- has fallen in each quarter since the suit was filed. Taco Bell, a subsidiary of Louisville, Ky.-based Yum Brands Inc., accounts for about 60 percent of U.S. profit for Yum.
Yum shares fell 30 cents at $62.35 in Thursday afternoon trading.