The management at Starbucks (NASDAQ: SBUX) will have more restless nights. According to documents from McDonald's (NYSE: MCD), Crain's Chicago Business says that the fast food company "plans to sell lattes, cappuccinos and other specialty drinks in all of its 14,000 U.S. restaurants next year. McDonald's predicts the new drinks will add more than $1 billion a year to sales."
One billion dollars. Starbucks did $2.3 billion in its last quarter, so if McDonald's can pick up that much of the market, it may be hard on Starbucks' same-store sales.
Howard Schultz, the founder of Starbucks, recently told The New York Times that his company had only scratched the surface of the premium coffee market. That may or may not be true, but he does have a much larger company that wants the same market, no matter how big it is.
Starbucks shares trade about $26, near their 52-week low and down from a 52-week high of $40. It does not look like those shares will be moving up.
Douglas A. McIntyre is a partner at 24/7 Wall St.











Reader Comments (Page 1 of 4)
10-02-2007 @ 11:25AM
Brian Patterson said...
My son got e coli 0157 H:7 from eating a McDonalds meal in August 2002. He was on morphine for 7 days. Both McDonalds and Zurich Ins. denied liability yet the CDC National PulseNet database found isolated and random PFGE matches. My advice to anyone is to save their receipts and a uneaten portion of their meal for further testing and confirmation.
10-02-2007 @ 12:07PM
investag8ting said...
McDonald's coffee is already better than starbucks, so I look forward to their lattes. They will probably be priced a lot better too.
10-06-2007 @ 11:03AM
GrannyH said...
The iced coffee really is a value for the money and tastes better than Starbucks iced lattes. The egg McMuffin has been listed as an acceptable alternative for a diet when the person is in a rush. McDonalds healthier alternatives have already hurt Subway---though they are a private company and we don't know the exact amount of pain. McDonalds may be able to put a dent in Starbucks armor especially considering that the economy is not doing very well and we are practically in recession.
10-07-2007 @ 2:22PM
cukibaba said...
mcdonalds coffee sucks as it is already. more water in it than coffee!!
10-07-2007 @ 2:49PM
Colleen said...
I'm excitied about the new coffee menu at MickeyD's. I hope they serve the coffee all day, it would make a nice after work treat.
10-07-2007 @ 2:49PM
Robert said...
ALL THESE FAST FOOD PLACES ARE POISON. FOOD IS BASICLY CRAP AND THE STAFF IS ABOUT AS HYGENIC AS A HERD OF SWINE!! ONE EATS THIS SWILL AT ONE'S OWN PERIL!! HERE'S A CLUE: PACK YOUR OWN LUNCH FROM HOME, COOK YOUR OWN MEALS AT HOME AND STAY HEALTHY. WHEN I HEAR "PARENTS" TELLING TODDLERS: "IF YOU'RE NOT GOOD YOU WON'T GET McDONALD'S" IT MAKES ME WANT TO CALL CHILD PROTECTIVE SERVICES.
10-07-2007 @ 3:27PM
HBear said...
Can AOL get any more typically boring and irrelevant? "Reporting" on McDonalds coffee. Wow, there's news! oh hey, McD's been doing coffee for decades, don't you remember, they keep it so hot it can give you third degree burns.
10-07-2007 @ 2:49PM
DLFROST169 said...
YOU CAN SEE STARBUCKS NOW OR GO TO MCDONALDS "LATTE"--TA TA
10-07-2007 @ 3:00PM
realestatemellie said...
McDonald's coffee in no way matches the quality of Starbucks. I don't think that McD's even fresh brews their espresso. They'll have to step it up a bit before I'm ready to give up my Starbucks.
10-07-2007 @ 3:16PM
Becky said...
McDonalds coffee is ten times better than Starbucks, plus it's alot cheaper. Starbucks coffee id bitter and nasty tasting, The only good thing they have is the vanilla latte. I hope McDonalds offers their own vanilla latte, alot cheaper. For the price of 1 Starbucks drink, I can get 4 at McDonalds and the taste is much better.
10-07-2007 @ 6:31PM
Rick said...
Better to go to a large burger with warm mustard ad a charbroiled burger
10-07-2007 @ 3:20PM
josh sexton said...
i think that its a good thing that mcd's is triumphant over starbucks, they're too high in cost to drink there. and above all every time you go one of the window people want a tip! it's completely obserd to pay almost ten dollars of hard earned money instead of a better quality that mcd's has out there and every single one of their selections are delicious. I hope they shut down starbucks for giving lousey coffee for extraordinary amounts of money! so my opinion is "GO MCDONALDS! IM LOVIN COFFEE AGAIN!
10-07-2007 @ 3:37PM
Carolyn said...
I went with a freind to Starbucks we ordered two chocolate coffees and two cookies. That cost me ten dollars! At McDonald's we both could of had a meal for that price!
10-07-2007 @ 3:54PM
Brett said...
McDonalds needs to get some damn veg items... I mean they've had the EXACT same food items for 20 years. If they put just ONE Veg item on the menu, sales would skyrocket. But they won't...
10-07-2007 @ 3:56PM
Mia said...
Hey Robert, I guess your mom deprived you of McD's food all your life...
6. ALL THESE FAST FOOD PLACES ARE POISON. FOOD IS BASICLY CRAP AND THE STAFF IS ABOUT AS HYGENIC AS A HERD OF SWINE!! ONE EATS THIS SWILL AT ONE'S OWN PERIL!! HERE'S A CLUE: PACK YOUR OWN LUNCH FROM HOME, COOK YOUR OWN MEALS AT HOME AND STAY HEALTHY. WHEN I HEAR "PARENTS" TELLING TODDLERS: "IF YOU'RE NOT GOOD YOU WON'T GET McDONALD'S" IT MAKES ME WANT TO CALL CHILD PROTECTIVE SERVICES.
Posted at 2:49PM on Oct 7th 2007 by Robert
10-07-2007 @ 4:03PM
Mary said...
I have worked at McDonalds and have to agree with Robert about the Hygenic of some of the workers. They come in smelling bad and leave the same way if not worse. As far as the new specialty coffee is concerned, I would rather spend alittle more at Starbucks and get more for my money plus McDonalds does not mix their coffee as well as they should.
10-07-2007 @ 4:06PM
Babe said...
I had McD's coffee for the first time (cold coffee) and it was a winner with me. It was so refreshing and a delight. I like StarBucks but their prices are wayyyyyyy to high. I will be anxious to try their other coffees.
10-07-2007 @ 4:13PM
Lisa said...
well, I really don't like Starbucks coffee. But McD's coffee is much better and priced good to. So I bet McD's wins this round.
10-07-2007 @ 4:15PM
Michele said...
I LOVE the new McD's iced coffee,,,,not to mention you really get your money worth on this one. I still go to Starbucks once in awhile though :-)
10-07-2007 @ 4:17PM
bluesdog said...
two words:rodent droppings.