McDonald’s Going After Starbucks
For most Americans, seeing a new Starbucks being built (seemingly overnight) is a ubiquitous event. Especially for those who live in cities like New York and Los Angeles, where it’s almost impossible to walk a block without seeing one. For years, McDonald’s has been the uber-chain, opening stores in every corner of the world, and tailoring their menu to the tastes of local populations around the globe. McDonald’s is the largest restaurant chain in the world. Now, the Golden Arches have Starbucks in their sights, and are brewing up a recipe to move in on the Seattle coffee company’s turf.
McDonald’s has already opened 9,000 McCafes in the U.S., and judging from the results, more are certain to follow. Starbucks is the leader in the gourmet coffee chain, and is one of the biggest successes in recent years. However, their shares’ values have plummeted in the last year, and even though they still remain #1, McCafe is #5 and looking to knock off the big boys.
Coffee is one of the highest margin products available, and McDonald’s is selling their lattes, cappuccinos, and espressos at a quarter of what Starbucks does. Not only that, but McDonald’s food sales have spiked also, as many coffee drinkers order breakfast, or a snack to go along with their hot beverages. An article from Bloomberg states:
Word is getting out about McDonald’s coffee. In March, Consumer Reports magazine reported a taste test of basic black coffee found McDonald’s stronger blend beat brew from Starbucks, Burger King Holdings Inc. and Dunkin’ Donuts Inc.
Should Starbucks worry? Perhaps. McDonald’s has a pretty good track record of edging into specialty markets, as they recently did with the Mexican chain Chipotle.
