The battle to dominate the breakfast market is heating up between McDonald’s (MCD) and Yum Brands (YUM). Yum’s Taco Bell division is fast becoming a force to be reckoned with. The chain has grown its breakfast menu to 16 items following last year’s launch of the waffle taco and is hungry for more early morning success. Same restaurant sales are up 6 percent for the second consecutive quarter and Yum Brands announced “we are far from done innovating in breakfast by a long shot – Taco Bell has an innovation pipeline that is very robust.” Breakfast now makes up around 6 percent of Taco Bell’s business, versus 25 percent of McDonald’s US operations. Next up Yum is pushing on with menu revamps at KFC China following food quality scares and declining sales. Yum will also go head to head with Starbucks (SBUX) in China with their addition of a premium coffee line. But it’s not all smooth sailing in the battle for breakfast, at Pizza Hut Yum continues to struggle with sluggish sales. Despite a millennial friendly menu overhaul, and breakfast home delivery Pizza Hut sales dropped 3 percent last year. Yum conceded the pizza chain is currently their weakest breakfast link.
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