Yesterday McDonald’s launched a new Breakfast initiative in New England. We see this as a move to steal share from Dunkin’ Donuts that could make life difficult for DNKN longer-term.
According to the Boston Globe, McDonald’s new “menu items include cheese Danish, two kinds of muffins, banana bread, and vanilla scones. Unlike the traditional McDonald’s breakfast menu, which features offerings such as oatmeal, pancakes, and variations of the long-popular Egg McMuffin, the baked goods will be available all day.”
The initiative was organized by/for McDonald’s Boston region and will be sold in Albany, N.Y. Massachusetts, Rhode Island, Connecticut as well as a few other states in the Northeast.
The New England region worked with menu management team in Oak Brook “to create a line of breakfast pastry products that they believe will resonate well with the local customer base” according to McDonald’s. The products are par-baked and are prepared daily in the existing breakfast ovens that are used to cook McDonald’s biscuits and pies.
We are hearing that the prices are very competitive and are consistent with the “extra value meal” section of the new menu initiative being launched at the end of March The McDonald’s products include a Cheese Danish for $1.79 or $2.79 with coffee, muffins for $1.59 each, three mini scones for $1.89 and Banana Bread for $1.59 per slice.
We have seen several times how ruthless a competitor McDonald’s is and we do not see this foray into Dunkin’s turf as being insignificant. The baked goods are a natural extension of the McCafé initiative launched in 2009. The baked goods are going to be sold throughout the day and, while it’s difficult to know for sure how they will do, DNKN is clearly in MCD’s crosshairs.