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McDonalds vs Subway – Battle of the Breakfasts

According to Dow Jones, Subway will launch a breakfast menu consisting of omelettes and breakfast sandwiches at most of its 23,000 U.S. stores on April 5. Subway, which is a business unit of privately held Doctor’s Associates Inc., is already selling breakfast items in several test markets. To accompany the national launch of a breakfast menu Subway has also begun to sell Starbucks coffee at its U.S. stores. With 23,000 stores nationally Subway will become a serious competitor to Oakbrook, Illinois based McDonald’s Corporation, which currently has 14,000 U.S. stores. McDonald’s is already fighting fiercely to protect the U.S. breakfast market which they have dominated for decades and currently accounts for nearly 25% of their sales and an even higher percentage of the company’s overall profits. The major competitive threat to McDonald’s up to this point has been Burger King and Starbucks. McDonald’s has recently also experienced a decline in their breakfast sales due to a high-level of unemployment from the recession which has reduced the demand for fast convenient breakfast options for people driving to work. To combat the recession induced sales decrease McDonald’s recently launched a Dollar Menu solution for breakfast. McDonald’s also introduced the McCafe concept last year which included specialty coffee drinks nationwide to defend their breakfast market and to compete head to head with Starbucks. McDonald’s breakfast niche is being attacked from multiple sides and the new threat from Subway will make it increasingly challenging to defend against. Subway’s entry into the U.S. breakfast market may be McDonald’s fiercest battle yet. With Subway’s 23,000 U.S. stores and the company’s ability to make specialized sandwiches many view as more healthy make it a formidable competitor in the looming breakfast battle. Subway’s breakfast menu will feature customizable “omelet sandwiches,” which include eggs or egg whites, cheese, ham, bacon, sausage, steak, peppers and onion and any of Subway’s other traditional sandwich toppings. The breakfast sandwiches will be served on English muffins, flatbread, or the company’s sub-sandwich bread.