Filed under: Products and services, Consumer experience, Competitive strategy, Starbucks (SBUX), McDonald’s (MCD)
“The place reeks of fries and beef.” That’s the charmingly candid assessment of McDonald’s (NYSE: MCD) from Chris Dannen at Fast Company’s blog. As you can probably guess, he’s none too impressed with Mickey D’s plan to open 14,000 new coffee bars in its U.S. stores.
For Dannen, it’s a pretty easy question. Will people buy more fancy coffee drinks in a fast food restaurant that smells of fry grease? He doesn’t think so. As a result, McDonald’s coffee bars — which the company hopes will bring in an extra $1 billion in revenue — will be defeated by the “sweet stink of the flagship fare,” namely, Huge Macs and those never-decomposing French fries. That’s good news if you’re a Starbucks (NASDAQ: SBUX) shareholder.
BloggingStock’s own Aaron Katsman has a similar concern about McDonald’s plan. Saying that he often meets clients at Starbucks, he wonders whether anyone would ever do the same at a McDonald’s. Hard to imagine telling a prospective business partner to meet you under the golden arches, isn’t it?
However, Todd Sullivan at Seeking Alpha strongly disagrees with Dannen and the rest of the skeptics. He argues that coffee sales at McDonald’s occur mostly at breakfast, when the burger and fry smells are at a minimum. And in any case, you can’t smell the grease when you’re ordering at the drive-through window. (That’s not exactly true, since the blue haze of greasy smoke that lingers outside of some fast food places can penetrate even the tightest window seal, but he has a point.) If he’s right, then McDonald’s is apt to continue stealing customers from Starbucks and other fancy (and more expensive) coffee joints, and Americans are about to begin drinking a whole lot more java from the house that Ronald built.
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