Coalition of Franchisee Associations
July 15, 2008
But the Ribs Were Great!
I spent a few days last week in the Heart of America
Co-Op (Kansas City) trying again to evaluate the service
impacts of McCafe. Fortunately the market is now selling
so few Specialty Coffees that I can report there are no
negative impacts on service.
For the week ending 6/26/08 the market's weekly units
were 217 - lowest since the launch on 10/18/07.
Obviously the Heart of America Co-Op needs to spend
more money advertising McCafe.
Remember that Kansas City is the most mature market in
the country with the full beverage cell remodel. The larger,
long term test, has been in Michigan which did not roll
with the beverage cell. However, the remodel is now being
forced on Michigan Owner/Operators even though the region
is only selling 234 specialty coffees a week.
The Raleigh Region is blaming Operators for "poor execution" as the reason for the anemic coffee movement in the region.
Seventeen weeks into the launch Raleigh sold a trailing four week average of 198 units per week.
Bakersfield, CA is barely breaking 100 a week. Compared to over 400 a week back in March. Can you imagine spending all this money and only selling 15 a day? Oh well it's mostly O/O money, not real cash to mcd corp.
Much like Made for You, Corp cant afford to let CBB fail or be cancelled.Operators be damned.This is where the NLC MUST take a stand, but those milquetoasts wont.Word to the wise...buy the machine, NOT the beverage cell. SAVE $100k
whats interesting in these markets that are selling spec. coffee is that they are NOT doing the 100 days of summer drink promos.
Another interesting development. Most of the CBB meetings between the Operator Teams and the McDonald's Corporate type staff are closed. What kind of mischief are they up to with sales, so far, that do not make a business case? Stay tuned for more pressure to continue the CBB Program. Why doesn't the NLC ask Don Thompson the hard questions about CBB sales and progress so far with the roll out? After all, the NLC Representatives work for our interests not the Company (oops CIA types) I mean the McDonald's Corporation and the Stockholders.
Isn't 100 days of summer(highest volume)in Michigan a long time to experience margin reductions? Let's find out how it's doing before it rolls out across the country as another $1 promotion that sets our pricing for several years?
They are currently trying to manipulate the numbers so it looks like it is working.
The push for the CBB expansions is the same motivation that Corporate McDonalds pushed with the ever expanding Angus plans. It was, as most service companies and us mechanics agree, not made to sell Angus. It was put in place to force O/O's to buy new grills to accept new products and to upgrade aging equipment; Angus is a "bonus", if you will. CBB is being funded at 40% corporate and 60% O/O, with some expansions being more expensive than others (as no two projects are alike.) The other half of CBB is the Smoothie machine (from Taylor) which is in test in Bakersfield right now and will be in stores next year (2nd quarter probably.) But the key to all of this is the fact that stores with CBB are to keep 1 employee to staff the beverage area, and make OJ, McCafe, Smoothie and Iced Coffee orders ONLY, which corporate believes will cut down on the restaurants TTL's and waste. In theory, its a good system. (Not that the store managers would ever get it.)
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