Small Business

McDonald's vs. Taco Bell: Fast food wars turning ugly

Breakfast battle heating up
Breakfast battle heating up

In the latest evidence of fierce fast-food competition, some McDonald's restaurants are offering free food to Taco Bell customers.

Participating McDonald's locations in northeast Pennsylvania will fork over a free Egg McMuffin sandwich to diners who bring in a Taco Bell breakfast receipt now through April 17. (Tweet this)

The promotion is limited to one per person. It was not clear if the offer was headed to other regions, though there was some evidence it may have been promoted in Texas as well.

The company was not immediately available to comment on the program.

A McDonald's Egg McMuffin breakfast sandwich is shown in San Rafael, Calif.
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Breakfast has been a key battleground in the industry's fight for customers as chains increase their emphasis on early morning offerings.

Fast food breakfast spending rose 7 percent in the year ended in February, according to The NPD Group/CREST. This is more than double that of lunch and dinner, which each rose 3 percent.

Janney Capital Markets analyst Mark Kalinowski wrote the promotion is an indication that "clearly, at least some McDonald's folks are concerned about the potential competition at breakfast that Taco Bell could provide over time—and maybe is providing right now."

Recently, McDonald's Chief Administrative Officer Peter Bensen described breakfast as the "strongest day part we have going right now."

But the restaurant giant faces increased competition from Taco Bell, which launched nationwide breakfast last spring. Since then, breakfast has grown to 6 percent of the chain's mix, the company told analysts in February.