Sign in to comment!

Fast Food

Will McDonald’s all-day breakfast make egg shortage worse?

ertert465546fdsg.jpg

McDonald's all-day breakfast may exacerbate the egg shortage crisis. (Reuters)

Earlier this week, McDonald’s thrilled McMuffin fans by announcing that it will start offering all-day breakfast nationwide

But some analysts say that the all-day breakfast offering may exacerbate the growing egg shortage brought on by the worst outbreak of avian flu in the last three decades, reports Bloomberg.

“It’s going to make it harder for everyone,” Darren Tristano, an executive vice president at research firm Technomic, told Bloomberg. “It’s going to lift prices across a lot of those products that use eggs.”

Not only will strained suppliers have to get more creative with sourcing eggs, but consumers may end up paying significantly more, he said. 

In June, the average price for a dozen eggs reached $2.57, holding steady through July, according to data from the Department of Agriculture. Earlier this year, avian flu killed off more than 48 million birds—many of them egg-laying hens.

McDonald’s round-the-clock breakfast strategy is part of chief executive officer Steve Easterbrook’s plan to revive slumping sales, which have reached their lowest in a decade. During an internal company presentation, the chain revealed that the breakfast offering could boost sales by as much as 2.5 percent a year.

"It's probably not going to be the best timing for McDonald's, unfortunately, but it's part of a longer-term strategy to focus on what's working and increase that," Nick Setyan, equity analyst at Wedbush Securities told CNBC.

The full breakfast line-up won’t be available all day, according to the plan voted on by franchisees, but McDonald’s will sell either muffin- or biscuit-based sandwiches, along with hot cakes, sausage burritos, fruit-and-yogurt parfaits, oatmeal and hash browns. The chain may forgo certain midday meal items to make room for the change.

This change comes as other fast food chains are limiting their exposure to eggs.  This summer, eggs were dropped from Rita's frozen custard and Panda Express' hot and sour soup, and Dunkin' Donuts withdrew a major promotion it planned for the current quarter. 

McDonald's, one the the country's largest commercial egg purchaser, typically locks in the prices of its eggs with its suppliers. Analysts say it could be months before there is an easing in the price of fresh eggs.

But there is good news on the horizon. In July, USDA data showed domestic frozen egg supplies actually increased at the end of the month.