A bigger breakthrough may come out of the company's experimental restaurant in Romeoville, Ill. Today the standard McDonald's kitchen has room for one built-in grill. As a result, restaurants have to stop serving breakfast in the late morning so crews can begin sizzling up burgers for the rest of the day. The company is working on a potential solution to this conundrum: a portable electric unit that would permit kitchens to serve breakfast all day long.

It's hard to believe that the pace in Garner could get much quicker. At the height of mealtime rushes, the place routinely serves 90 cars an hour, vs. 77 two years ago. Crew chief Todd Marsh plucks hash browns from the fryer rack and steps back to the pickup window to hand out another breakfast. He resets the wall-mounted timer that had been digitally ticking off the seconds since the order was placed. Sixty-five seconds. Store manager David Mardenborough, who charts these times hour by hour, beams.

Maintaining McDonald's mastery of the morning will not be easy. Starbucks has begun making hot breakfast sandwiches and plans to offer them to 6,500 U.S. outlets by the end of 2008. After testing its own hot breakfast sandwiches at 120 locations, Wendy's is contemplating rolling out breakfast to its 6,300 restaurants in the U.S. and Canada. Dunkin' Brands Inc. has announced plans to triple its doughnut chain, to almost 15,000 shops, while adding new products like breakfast pizza to a line that already includes its knockoff of the Egg McMuffin.

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Many restaurant analysts and consultants are betting on McDonald's to win the breakfast battle. Even 22 years after introducing the Croissan'wich, they note, Burger King Holdings Inc. has never come close to matching McDonald's sales volumes at breakfast. "The breakfast habit is the hardest habit to break," says CIBC's Glass. "We're promiscuous at lunch and dinner, but we tend to be monogamous at breakfast."

Afternoon: Midday snackers may be the least loyal. They enjoy temptations ranging from Starbucks Frappuccino and fruit smoothies at Jamba Juice to Big Gulps at 7-Eleven. To shove its way to the front of this crowd, McDonald's has had no choice but to reinvent both its products and its store design.

The company's most important new enticement for these customers is its $1.29 Snack Wrap, a strip of deep-fried chicken with cheese, lettuce, and a squirt of sauce tucked into a folded tortilla. Before it was introduced in August, McDonald's considered every detail in creating the wrap. Because so many consumers are on the go, the company needed something people could hold easily in one hand while gripping a steering wheel in the other. Since salsas would drip, McDonald's opted for thicker ranch dressing. To further guard against spills, it went with a larger, 8-inch-diameter tortilla. The planning is paying off: The company has attributed strong same-store sales growth in the last five months in part to the Snack Wrap. To keep the momentum going, the company is introducing a new version, with either fried or grilled chicken and honey-mustard dressing, in late January.

Don Williams got hooked on the Snack Wrap after his first one. It is 3:27 p.m. Thursday, and Williams, 54, a self-employed electrician, has stopped by in between jobs for something to tide him over until he can have dinner at 9 p.m., after his wife gets home from work. He ceased eating McDonald's burgers some time ago to cut down on his cholesterol. But while the Snack Wrap is hardly low-fat, he figures he eats one three times a week. "I like this little quick sandwich," he says. "It gives me enough energy to carry me for another two or three hours."
One reason McDonald's is creating crowd-pleasers again is that it has become much more rigorous in product development. New ideas are generated in the company's food studio in Oak Brook by a staff of three dozen chefs, food technicians, and market researchers. Potential new products get tried out first in one market for six weeks. The company doesn't just assess sales. It also monitors costs and margins and judges how easy a new product is to prepare by a crew that is constantly changing. (The annual turnover among cooking crews companywide exceeds 100%, although it is about 70% for the Huebners.) If the concept passes muster, McDonald's expands its test cell to 800 to 1,000 restaurants in four to six markets.

CONTINUED : Growing pains

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