• by Karlene Lukovitz  @KLmarketdaily, March 15, 2010

It's no secret that the restaurant meal has for several years now been the most hotly contested daypart among restaurants. New data from Mintel point to an acceleration of that battle, as restaurants expand their offerings even as consumers cut back on breakfasts out and check sizes. 

Mintel's tracking shows that restaurant chains have added a whopping 460 new breakfast items to their menus just last year -- even more than in either 2008 or 2007.

But at the same time, Mintel's November 2009 survey showed half of U.S. consumers indicating that they spent less on breakfasts last year than in 2008, while just one in 10 indicated they had spent more.

Moreover, nearly half said they don't eat breakfast out during the week (47%) or even on weekends (45%).

Restaurant breakfast and brunch sales fell 3.4% between 2007 and 2009, according to Mintel, and the category is expected to grow only modestly through 2011 before regaining momentum. The researcher forecasts that the breakfast foodservice market will expand by 13% between 2009 and 2014.

"We see an increasingly competitive market for restaurant breakfast, even though sales have declined," sums up Eric Giandelone, director of research, Mintel Foodservice. "Restaurants are refreshing their breakfast menus, but I believe that reduced consumer spending, as well as relatively high unemployment, will limit sales growth over the next year."

How can restaurant operators position themselves to win share when consumer options are expanding while sales are contracting? Giandelone stresses the need to be "keenly aware of what drives people into restaurants for breakfast" -- recognition, for example, that Mintel's research shows people driven mostly by low prices and convenience for weekday breakfasts, but food quality on weekends.

Recognizing consumers' strong desire for the ability to get breakfast fare outside of traditional breakfast hours is also critical, says Giandelone. Indeed, the top item cited by consumers when asked what they would like to see more of in relation to restaurant breakfasts was "all-day breakfast (36% want this on weekdays, 38% on weekends).

Not surprisingly, a desire for more "value" breakfast options is also a top-runner among consumers surveyed (cited by 32%).

Mintel's data confirm the hot-as-a-griddle competitive environment that is already apparent in the growing number of breakfast category moves by major chains.

The long list includes last month's announcement by Burger King that it will add Starbucks Corp.'s Seattle's Best Coffee to all U.S. locations -- a clear response to the success of McDonald's McCafe coffee drinks line. Burger King, McDonald's, Dunkin' Donuts, Wendy's, Denny's, Hardee's, Carl's Jr. and just about every big brand out there have expanded breakfast offerings, many with an emphasis on value and convenience items.

The list of chains offering all-day breakfast menus has also grown, as old-timers like Jack in the Box and IHOP have been joined by Denny's and others.