Dive Brief:

• McDonald's will begin offering three new breakfast items on Oct. 28 at participating restaurants as part of its new McCafé Bakery lineup, according to a press release.
• The apple fritter, blueberry muffin and cinnamon roll will be available all day at participating restaurants and mark the first permanent additions of bakery items to McDonald's core menu in over eight years. 
• Breakfast has been the most challenged daypart during the pandemic, with fewer morning commuters, but McDonald's has long struggled to grow morning traffic. CEO Chris Kempczinksi said during the company's Q2 2020 call with investors the company will focus back on this daypart from a marketing and investment standpoint. These additions mark the first iteration of that plan.

Dive Insight:

McDonald's has long-struggled with the breakfast daypart and continued to drag its Q2 2020 sales, but the new additions could gain traction with consumers. The company has already had success with new menus, with the company facing temporary shortages of its Quarter Pounder in September due to the popularity of its Travis Scott meal. It also faced similar shortages of its Spicy Chicken McNuggets, Mighty Hot Sauce and Chips Ahoy McFlurry two weeks after debuting these menu items in September due to their popularity. 

This is also the company's first breakfast innovation since January, when it added Chicken McGriddles and McChicken Biscuits to its menu. In 2019, it offered McCafé Donut Sticks as an LTO, which helped boost its Q1 2019 by 4.5% in the U.S. 

While new menu items are driving much needed traffic, the company also has improved drive-thru times and speed of service after pulling its all-day breakfast menu early in the pandemic. The new bakery items, which will be available all day, could also appeal to those customers missing the all-day breakfast menu. The future of the all-day breakfast menu remains in doubt, and franchisees and workers said they don't want to return to the model because restaurants are faster without it. If its new baked items have the same amount of success as its new menu items, the company won't need to bring the menu back.

The baked goods could also help differentiate the chain from its competitors that have been increasingly focused on the daypart and seen increased traffic and sales. Wendy's, which launched its breakfast lineup in March, saw sales of its morning daypart become 8% of its U.S. systemwide sales during Q2 2020. Panera also launched a coffee subscription program in February, growing its membership to 800,000 as of mid-July. Taco Bell, which suspended breakfast during the pandemic, appears to be bringing it back, adding to the competition.