IRVINE, Calif. - Taco Bell will soon be entering the fierce competition for breakfast, Nation??s Restaurant News reports. The chain will be adding a permanent breakfast menu at its 5,600 U.S. locations in late 2011 or 2012.

The quick-service Mexican chain has dabbled in breakfast previously, but did not roll out the menu to its entire chain. Earlier this year, Subway added a line of breakfast sandwiches.

At least one analyst thinks Taco Bell has a chance to succeed with breakfast. "Obviously, a nationwide breakfast launch is not assured of rousing success ?" just ask Wendy??s," said Mark Kalinowski of Janney Montgomery Scott Capital Marketsrote. "Nevertheless, the long-term opportunity for Taco Bell is so large, and Taco Bell??s differentiated brand positioning [is] such a potential help, that over the long run we believe that Taco Bell will get it right, creating value for shareholders in the process."

Kalinowski wrote his thoughts after touring an Arizona Taco Bell that served breakfast, one of the few test markets for the morning daypart menu. "Over the last 20 years, when Taco Bell has previously tested breakfast, it emphasized a higher flavor profile and/or food quantity," said Kalinowski. "With this test, though, value, including value pricing, seems paramount."

Taco Bell appears to be embracing a model that includes mid-priced, to-go foods, such as a double-hand-and-cheese melt and a sausage burrito. The line also has inexpensive products, such as potato-and-cheese roll-ups, breakfast burritos and hash browns all for under a dollar. The chain has partnered with other brands to offer items, such as Cinnabon Delights, a Morning Wrap and Morning Biscuit with Jimmy Dean sausages, and Seattle??s Best Coffee.

The new menu seems to be testing well, with breakfast sales increasing approximately 60 percent when the new items debuted at restaurants still serving the older version. The chain will rollout breakfast on a national scale when the menu shows promise of upping annual sales per location by $65,000 to $70,000.

Read more about how convenience stores are grabbing market share from QSRs for breakfast in the May issue of NACS Magazine.