Convenience stores eat breakfast at fast food chains

Fast food restaurants are losing breakfast customers to convenience stores.

Morning meal traffic to fast food chains rose 1% in the three months that ended in July, while visits to food forward convenience stores rose 9% over the same period, according to market research firm Circana.

“In the long term, convenience stores have really shared their food service, but the morning meals have been their strong suits,” David Portalatin, Senior Vice President and Foodservice Industry Advisor at Circana, told CNBC that the trend is driven primarily by what the group calls “food forward convenience stores.”

For decades, McDonald’s And its rivals tried to get consumers away from home to eat early morning offerings, and bet that convenience and unique items would win the diner. According to Portalatin, fast food chains have made some intrusions, but 87% of people who eat and drink in the morning come from their fridges and pantry. It leaves plenty of opportunity for fast food chains and others who want a slice of their breakfast pie.

Before the pandemic, fast food chains began looking at convenience stores, a new rival for breakfast customers. Regional chains like Wawa in the northeastern region Casey’s general store In the Midwest, fast food companies were getting pages from their own playbooks to expand their reach and investing in foodservice options.

For some time, the lockdown and the shift to hybrid work have overturned the profits of these market shares. But in the three months that ended in July, food-forward convenience stores once again gained the advantage in the battle to serve consumers’ breakfasts, according to Portalatin.

The Circana separates food-forward convenience stores like Buc-EE and Sheetz from the broader industry, but it could soon be chained under its umbrella. The US’s biggest convenience, or C-store, 7-Eleven, is planning to invest more in the prepared food business, inspired by the success of Japanese business. Wednesday C-store chain Racetrac announced it would buy Potberry At around $566 million, it is unclear what the sandwich chain plans include beyond expanding footprints.

More diners have been monitoring their budgets in recent years, aware of rising menu prices and a tough job market.

According to data from Revenue Management Solutions, advice on how to increase sales and profits, previous morning traffic to fast food chains has declined quarterly for the past three years. Fast food breakfast visits fell by 8.7% in the second quarter.

To see the struggle, look no further than McDonald’s, who dominates the quick service breakfast category.

“…The breakfast day part is the most economically sensitive day part because it is the easiest day part for stressed consumers, so choosing to skip breakfast or eat breakfast at home.” “And we see that, like in other parts of the industry, the breakfast day part is the weakest day part of the day.”

McDonald’s morning visits accounted for 33.5% of traffic in the first half of 2019, but fell to 29.9% in the first half of 2025, according to data from Placer.ai. To try to drum up traffic, the chain included breakfast items in a new extra value meal, including a deal with sausage McMuffins with hash browns and a small $5 coffee.

To reverse the breakfast slide, fast food chains are taking cues from the competition. The dynamics have been turned over after years of convenience stores searching for fast food chains for ideas on how to grow prepared food sales, from order kiosk installations to new menu items.

“(Quick Service Restaurant) is considering late-night sales and early-morning sales. They look directly at convenience stores and say, “What’s working? How can I bring that to the store?”

Prepared food offers a lifeline to convenience stores as demand for gasoline, cigarettes and lottery tickets decreases over time. Industry-wide foodservice sales reached $121 billion in 2024, according to NACS data.

Most customers visit the gas pump on their way in and out of work, morning and evening rush hours, providing a great opportunity for C-store to sell breakfast and dinner. This year, 72% of consumers surveyed by Intouch Insight said they view C-Stores as a real alternative to the fast food chain, starting with 56% a year ago and 45% two years ago.

Overall, store C, which focuses on fresh food, attracts more customers.

For example, Wawa has seen its customer base increase by 11.5% since 2022, and has seen fast food chains McDonald’s, Burger King, and Wendy’s According to data from Indagari, a transactional data analytics company, their total customer base is shrinking by 3.5% at the same time.

The majority of the 1,170 respondents from CNBC’s Intouch Insight survey said they purchased breakfast they made from C Store in the morning in the past three months. 48% of respondents said that choosing breakfast from a convenience store would replace a visit to a fast food restaurant like McDonald’s or Dunkin’s.

Buying coffee and breakfast from the C-store is unlikely to be cheaper than making it at home. But consumers see it as a “good bang for their money,” according to Sarah Beckett, vice president of sales and marketing at Intouch Insight.

Additionally, C-store customers get a wider range of options. In addition to coffee, gas stations sell energy drinks, protein shakes and yogurt smoothies. Customers can also pick up granola bars and bananas and accompany them on a breakfast sandwich. Fast food chains don’t have that kind of diversity.

But most importantly, the food itself is what is important to consumers.

“(a) Convenience stores have a rough tail because they have low prices, are the ultimate differentiator, and actually separate the winner from the loser, but the quality aspect is its quality,” said Portalatin of Circana.

Brady Cabinets, a 33-year-old account executive at Byliwick who lives in Minneapolis, told CNBC he indulged in breakfast pizza from Casey’s general store while he was on his trip. When he returns to a house where there is no Casey nearby, he is McDonald’s, Dunkin’s, or Starbucks If he’s in the mood to buy breakfast.

The Iowa-based chain claims to be the third largest C-store chain in the country and the fifth largest pizza concept based on its number of locations. Casey reported sales growth at the store of 5.6% for prepared foods and prescription drinks for the three months ended July 31st.

Like Taco Bell’s Mexican pizza, Casey’s breakfast pizza has a choice of cheese, scrambled eggs, bacon, sausages and vegetables, and cult following has grown since its launch in 2001.

“I think Casey is kind of unique,” Kabbines said. “In my life, I had an egg McMuffin.”