Here's Why Dunkin Donuts and Starbucks Will Be Serving Lunch

Source: Dunkin Brands

Much has been made of the attempts by chains normally associated with meals served later in the day, like Taco Bell and White Castle, to steal some of their burger joint rival’s breakfast market, a commanding 31% share of the day part that generates an estimated 20% of McDonald’s $28.1 billion in annual worldwide revenues. However, with so many choices over where to dine, there’s no established leader for other meals of the day, meaning some restaurants typically thought of as breakfast destinations can also make forays in the other direction and try and elbow into meals served later in the day.

Bloomberg News reports Dunkin Brands’ just began serving flatbread chicken sandwiches at its Dunkin Donut shops.  That follows Starbucks rolling out several new lunch sandwiches at its stores, a move designed to squeeze more dollars out of its store later in the day.

Yet just like convincing customers that a Mexican fast food joint has something you’d want to eat with your morning coffee, consumers will need to be educated that a traditional breakfast food item — donuts, for instance — can also offer something more nourishing nd satisfying later in the day.

As Dunkin’s president of global marketing and innovation told Bloomberg, “The biggest challenge is generating awareness.”

ALSO READ:  Ten Companies With the Least Valuable Workers

Dunkin has a bigger challenge, though, than Starbucks, which has experimented with offering food items for years and generates about 60% of its revenues from customers visiting its coffee shops after 11:00 a.m. The donut shop, on the other hand, only makes 40% of its sales after the morning rush is over.

The difficulty is that breakfast is the only meal day part showing any growth. According to the market researchers at NPD Group, breakfast — which accounts for 21% of the total spent on meals all day long — saw sales grow 3% in 2013, while both lunch and dinner witnessed a 1% drop. Late night snacking, though, was also up 1%.

Still, with lunch representing more than a third of the dollars spent, it remains one of the biggest opportunities for morning-leaning restaurants.

In the end, the expansion by chains into day parts they’re not traditionally associated with shows there’s no time period that’s not important. Whether its Dunkin Brands and Starbucks moving into lunch, Taco Bell and White Castle serving waffles for breakfast, or a place like pancake house IHOP doing dinner (something they’ve done for a long time), we now have a 24-hour culture and to remain competitive restaurants will need to battle over every meal and every dollar being spent. They’re already paying for the land, the building, and the equipment around the clock, so they may as well make the best use of every daypart hour.

Some, like McDonald’s, will likely continue to dominate their respective niche, but in this war for consumers stomachs — and wallets — no one can expect to remain unassailed any longer.

Your credit card may soon be completely worthless

The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them — but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless — and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven’t seen since the dot-com days. Click here to watch this stunning video.