Subway says its four-month old foray into breakfast has exceeded expectations and it plans to expand its early-morning menu with limited-time offers and explore adding more coffee- or espresso-based beverages. Subway's breakfast program features egg and cheese sandwiches served on whole-wheat English muffins, flatbreads or Subway's traditional 6-inch and foot-long hoagie (we say "hero" in New York) breads. "The franchisees are happy and the customers are buying the product," Larry Varvella, Subway's research and development project leader, tells Elissa Elan without disclosing sales numbers. "In the past, the menu mix was higher in non-breakfast items, but now we're …

William Neuman reports that the National Cattlemen's Beef Association, which this year is expected to receive nearly $51 million under a federally sanctioned program to market its meat, spent tens of thousands of dollars over a two-year period to support lobbying activities. If true, it would be in violation of the 1985 Farm Bill that assesses a mandatory $1-a-head fee on the sale of cattle for marketing and research purposes but expressly forbids using the funds to lobby government officials. The disclosure comes after a review by the Cattlemen's Beef Board, which is appointed by the secretary of …

Procter & Gamble CEO Bob McDonald is expected to earn plaudits tomorrow when the company reports its year-end financial results for the first year of his reign, David Holthaus reports. The company has introduced more bargain-priced products, streamlined its costs, pushed more vigorously into developing countries such as India and Brazil and pumped up its ad spending behind new products. "One year is too early to give him an effective grade," says Bahl & Gaynor analyst Matt McCormick. "But I'd give him a more than satisfactory mark." P&G says last year was "an investment year," meaning …

Martha Stewart is hotter than ever, Jack Neff reports. Kmart is gone but she's on shelves in Macy's and The Home Depot; PetSmart and Michaels. And she's not just pushing housewares and garden goods anymore. Cosmetics may be next. "We have unlimited openness to listen to new business opportunities, and Martha is absolutely one of the most beautiful people I've ever met or worked with," says Robin Marino, CEO of merchandising for Martha Stewart Living Omnimedia. "So skin care could be something we'd be interested in down the road for sure." While Stewart's publishing ventures are …