"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 simple 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, Big 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 likely to continue stealing customers from Starbucks and other fancy (and more expensive) coffee joints, and Americans are about to start drinking a whole lot more java from the house that Ronald built.











Reader Comments (Page 1 of 1)
1-24-2008 @ 11:53AM
pinkcrackpot said...
There is a McDonalds in Los Angeles just down the street from the Wells Fargo Museum that is beautiful. Not a lot of kids there usually. The Big Mac is the same there as anywhere else. There is also a really pretty McD's in Jonesboro, Tennessee. It's new, small, but the kid's play area is totally seperated and soundproofed from the main area! Salads, apples, fruit, yogurt, unsweetened tea, I love to eat there and could easily go to Starbucks if I wanted to, which I do every once in a while. Variety is the spice of life.
:)
1-14-2008 @ 10:58AM
Rick S said...
Their coffee already is stealing sales from other purveyors of coffee. When Consumer Reports gave McDonalds the thumbs up, I revisited this restaurant I hadn't been to in ages and now I'm a regular at their drive-through for coffee. Their price is right - which can't be said about Starbucks.
1-24-2008 @ 5:50PM
mike clark said...
Big Mac's coffee tastes like dish water
1-14-2008 @ 12:52PM
James B said...
The long lines, greasey fry timers blasting your eardrums to near pain tolerance, and the scalding hot temperature (even after being sued) of the coffee for the last 20 years are all signs McDollars will never deliver the quality coffee experience without a complete overhaul.
1-14-2008 @ 8:31PM
Bob said...
It is the darn kids running around. I want to enjoy a cup of coffee without rug-rats.
1-14-2008 @ 8:49PM
Tom said...
Wow, McDonalds is stinky? Lets see, french fries and Big Macs vs. the smell of burnt coffee and fakey-enviro-NYTimes-do-goodness. My heart drops every time I walk in to a Starbucks and realize that the poor part-timers behind the counter have to endure the Venti/Grande schtick every time someone with an entitlement complex walks up to the counter to order a trend server in a paper cup.
Not only that, but I can't wait to see groups of bored college students in pajamas and Ugz pretending to do their homework in every single Starbucks I visit.
1-18-2008 @ 3:03PM
J Starr said...
McDonalds restaurants are worldwide and some locations are better than others!
Try uptown areas especially in the heart of
New York,s financial district and you will be
amazed at MCD.
1-14-2008 @ 9:20PM
Dave said...
At least twice a week, my morning routine includes a drive-thru at MCD for breakfast and then at SBUX for latte. By the time I get to SBUX I've already finished my breakfast and deposit my MCD trash at SBUX. What else do I see in the SBUX trash can? Lots and lots and lots of MCD bags!
Check it out for yourself. My guess is that the new MCD coffees will save more than just a few people a little time and money!
1-15-2008 @ 12:02PM
M L said...
I have been to Mcdonalds "McCafes" in Chile and they are very much separated from the main McDonald's so that you can't smell much. They are partitioned by glass, decorated more like a Starbucks, and the smell of espresso dominates. If they do this in the US I think they have a good chance but it's not clear if they will.
1-15-2008 @ 5:49PM
Brian Patterson said...
My son got e coli 0157 H:7 from eating a McDs meal in CT. Both McD's and Zurich Ins denied liability yet the CDC National PulsNet found PFGE matches in their database. PFGE is the DNA of the toxin. Even the state of CT claimed there were no matches but was proven wrong.
Secondly, the US Dept. of Health and Human Services confirmed the CDC findings. The franchise purchased the meat from Lopez Foods in Okl.
1-20-2008 @ 12:42AM
WB said...
It's amazing to what lengths a disgruntled former employee will go to smear! Brian got fired from a McDonald's and passes this story to anyone he can. He doesn't even have children!
1-15-2008 @ 8:28PM
jim m. said...
In one unhyphenated word _ Bullshit! If you don't like McDonalds, truck your but to Safeway and small a whole damn grocery store and of course Starbucks is usually near the restrooms. Morons!
Jealousy stinks worse than reality.
1-16-2008 @ 6:29AM
chris tucker said...
I personally go to McD's for the homeless and drug addicts myself. Or the screaming kids and teenagers; apparently if someone is 5 feet away from you that isn't a reason not to yell your entire conversation.
It's always the same no matter where the McDs are, mouth-breather gathering at their slop troughs.
While the smug of Strbx is like a strained guitar string about to snap and the veneer of social consciousness is paper thin at least it's a lot quieter and cleaner and the homeless have to act like human beings.
Drive-thrus are one thing, but actual real estate and staffing for a losing proposition? Almost as bad as choosing a career C student to run your country.
1-16-2008 @ 7:09AM
Gregg said...
While I agree that while MCD"S does not have the ambience of Starbucks it does have a few things that Starbucks does not have.
1. Location - They do have good locations.
2. Free building - how much could it cost to put a coffee bar in if you have no overhead? They already own the building so that that's 300 cups a day they don't have to sell.
3. Captured audience - for all of you complaining about the kids - MCD's really is not worried about you. They are just happy up still come. All of those screaming kids have moms and dads and some of them drive BMW's and would rather be at Starbucks having a Venti or two. So while the little ones are running around on the playground mom and/or dad will have something else to spend money on.
4. Consistency - if they can do anything once they can do it 6 trillion times exactly the same.
5. Get them hooked early - I wonder what they will come up with to bridge the gap for from a Happy Meal to a Coffee for the kids. get the kids hooked early and they will be drinking them forever.
6. High Schoolers are going to Starbucks but they also go to MCd's and I bet they will not have a problem getting their coffee from MCD's.
At first I thought it was DUMB IDEA but now I think it is pretty smart.
1-16-2008 @ 2:24PM
Laurie said...
I live in a town with 3 major colleges within 10 miles of each other. I see college students in thier jammies and uggs daily in Starbucks. We also just got the new McCafe at McD's. The coffee (vanillia latte) I had was McGross! Very sweet and watery. I even sent it back - TWICE. I would rather over pay for a quality cup of coffee where the atmosphere is pleasent and the lobby is clean than pay for watered down crap, listening to screaming kids and walking on pop spilled sticky floors. Starbucks has nothing to worry about.
1-18-2008 @ 3:03PM
J Starr said...
McDonalds Corp (MCD) worldwide growth is positive for 2008. Expansion is progressive with new marketing strategies for this year. Analysts who like
Starbucks do not like MCD, because of product
competition.
1-21-2008 @ 10:44AM
Brian Patterson said...
To WB,
I am not a former employee of Mcd...only a father of a child who got severly sick from eating a McD's meal. This is all documented.
1-22-2008 @ 5:09PM
tommy said...
I am split if I want to treat myself to a good cup of coffee I go to starbucks. If I want a quick bit to eat in the mornning I stop at mcd. I don't think people will change where they get that cup of joe I just think the mcd ragulers will be happy to have more to choose from