Breakfast sales hold steady as people heading back to offices cut

Consumers may be dining out less, but breakfast sales are holding steady as people return to offices and grab a quick bite or iced coffee on the way to work.

Overall traffic to restaurants fell 2% in the second quarter from a year ago as inflation drove menu prices up, according to market research firm The NPD Group. The only category that was unchanged: breakfast and morning snacks.

Restaurant companies like Starbucks say morning sales are being driven in part by people returning to their pre-pandemic work routines. David Portalatin, NPD’s food and beverage analyst, also noted the relative affordability of breakfast items.

“For a lot of people, it’s simply a cup of coffee and maybe a specialty coffee that they’re paying a premium price for, but it’s sort of more manageable,” he said.

The cost for food away from home rose 7.6% over the 12 months ended in July, according to the Bureau of Labor Statistics. Prices for food at home climbed even higher, rising 13.1%.

Kathleen Flynn, a 26-year-old photo producer in New York, said she’s rarely eating out these days and has been cutting back spending. But she still stops by a coffee shop, La Cabra, each morning for a cardamom bun and a cappuccino.

“I have to do this because it’s my joy,” Flynn said.

Before the pandemic, the restaurant industry saw breakfast as the biggest opportunity to grow sales and gain loyal new customers. Fast-food chains stepped up the quality of their coffee and morning menus to convince people to swing through the drive-thru on the way to work or school.

In early 2020, just weeks before lockdowns, Wendy’s launched its breakfast menu nationwide, joining the likes of McDonald’s, Taco Bell, Burger King and Chick-fil-A in offering the morning meal.

But when the pandemic hit and shuttered offices and schools, breakfast saw the sharpest decline in sales. Starbucks reported that customers were buying lattes and macchiatos later in the day. Many Taco Bell locations opted to skip serving breakfast and opened later in the morning because of staffing challenges. By contrast, General Mills and Kellogg saw sales of pantry staples like cereal and Pop Tarts surge, while demand for orange juice climbed for the first time in years.

More recently as people started going out more often and reestablishing their daily routines, the trend is reversing. Total spending at quick-serve eateries, which includes fast food locations and coffee shops, climbed 32% in the 52-week period ended June 12, compared with 2019 levels, according to data from market research firm Numerator.

“Now that we’re getting back to more normalized behaviors, we’re really just returning to the oldest trend where breakfast was generally outpacing the growth of other dayparts,” Portalatin said.

More Starbucks customers are buying their coffee in the morning again. The company’s outgoing Chief Operating Officer John Culver told investors in early August that 51% of the chain’s sales in its latest quarter happened in the…