McDonald's coffee bars to take on Starbucks

Discussion in 'Wall St. News' started by S2007S, Jan 7, 2008.

  1. S2007S


    I hope MCD sells a great tasing cappuccino and latte for half the price starbucks is selling theirs for.......SBUX to the single digits....

    McDonald's coffee bars to take on Starbucks: report
    Monday January 7, 9:29 am ET

    NEW YORK (Reuters) - McDonald's Corp (NYSE:MCD - News) is set to launch coffee bars with "baristas" serving cappuccinos and lattes, moving into direct competition with global coffee chain Starbucks Corp. (NasdaqGS:SBUX - News), The Wall Street Journal reported on Monday.

    McDonald's will install coffee bars at its 14,000 U.S. stores, incorporating theatrics similar to Starbucks' counters, displaying espresso machines and having baristas prepare drinks, the report said.

    The report, citing internal documents from 2007, said the move will add $1 billion to McDonald's annual sales of $21.6 billion. McDonald's will also sell smoothies and bottled beverages, it said.

    A McDonald's representative was not immediately available for comment.

    Competition between the two companies has already been brewing, with McDonald's expanding its coffee offerings. Specialty coffee, along with breakfast items and lower-cost offerings have helped McDonald's outperform most other U.S. restaurant companies this year.

    Starbucks, on the other hand, has been tempering its previous message that its perpetual expansion was resistant to blips in the U.S. economy. It has said that it plans to open 2,500 stores in fiscal 2008, down from a previous target of 2,600.
  2. I think it's going to cost about 100k per store to implement this. A few franchisee's are complaining. Mucho margins in coffee.
  3. Will they be creating a coffee shop atmosphere, or will the coffee be served in their fast food environment? Stated differently, what exactly do they mean by installing coffee bars at their stores "incorporating theatrics similar to Starbucks' counters?" The reason I ask is that, given the choice, I would prefer not to sit at a bolted down table and in a plastic chair. Just a personal choice.
  4. Some MCD's offer Wi Fi now? I hate SBUX it's expensive and fake.
  5. 100% agreed except for the fact that the qualiity of babes at MCD's is nothing like SBUX. There is a herd of realtors in this area who raid the local SBUX and they'll do anything for a lead.


    But yea MCD's coffee is smoother and cheaper...
  6. not going to be a big deal to SBUX, I know that I can't even stand the smell of McDonalds from 100ft away!!!

    this news has been out for a loooong time
  7. I'm not sure what you mean by "fake," although I hate the names they have for their cup sizes. But I do know what you mean by expensive, charging $3.50 (CDN) for a small cappuccino. As an aside, I find Starbucks regular coffee a bit too burned for my taste (although very occasionally they get it just right) and their cappuccinos too weak (heck, they taste like cafe au lait). I prefer Second Cup's coffee, hands down. So when I do occasionally go to Starbucks, I usually just have a green tea when I can get a seat on the couch by the fireplace. For me, it's all about the couch and fireplace at Starbucks. Oh, and they play better music than the other cafes, including Second Cup.
  8. Frankly, I'd say if you counted the take out customers at starbucks, there is your MCD target.

    Notice year end finacial pundits, talking about ways to save money in the new year. They all mention "cut back on a starbucks coffee" save a grand a year.
  9. Yes, I believe you're right. Depending, of course, on the coffee.
  10. S2007S



    exactly right.
    #10     Jan 7, 2008