Fast-food giant McDonald's has announced that it will serve up all-day breakfast items, which could send egg prices soaring higher and place a greater strain on demand, experts say. An even bigger increase in egg costs could pummel breakfast franchises that already are weathering high prices.
Egg prices have spiked in recent months because of the worst outbreak of bird flu in U.S. history, killing more than 48 million birds in the first half of the year. Egg prices hit $2.57 a dozen in June, according to the U.S. Agriculture Department. The average price of Midwest large eggs was $2.45 on Aug. 31, compared to $1.35 for the same period a year ago.
“When you’re talking about an organization as large as McDonald’s in the U.S., any product they introduce will have the potential to disrupt the marketplace,” Morningstar’s restaurants analyst RJ Hottovy tells ABC Radio.
But Robert Maynard, CEO of better-breakfast brand Famous Toastery, a franchise based in North Carolina, tells 1851 that he thinks any disruption won't be that dramatic.
“Eggs are under pressure, of course, and I'm sure it won't help if 30,000 stores order more eggs, but I'm sure it will be short-lived.”
Maynard also predicts that McDonald's won't see a huge sales increase from its all-day breakfast plan.
“I don't foresee McDonald's being as successful as they think,” he says. “People want a better breakfast these days. People are more educated food-wise. There will be some people going to McDonald's all day, but Waffle House, IHOP, Denny's, etc., are all dying concepts that serve breakfast all day.”