January 29, 2014

McDonald’s Seeks to Out-Latte Starbucks

“McDonald’s is trying to look and feel more like Starbucks,” said Howard Penney, 
managing director at Hedgeye Risk Management LLC, who has covered the industry 
for 20 years. “It’s actually hurting them, not helping them” because the chain’s 
competitive advantage is food not beverages and because making complicated coffee 
drinks slows down service.

McDonald’s Seeks to Out-Latte Starbucks in Coffee War - Bloomberg:

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2 comments:

Anonymous said...

At some point, Oak Brook is going to have to wrap their heads around the fact that we cannot be all
things to all consumers. In fact, I‟m not sure what McDonald‟s is supposed to be any more. Used to be that if you wanted a quick, inexpensive meal that tastes great in a clean restaurant and super-fast, hassle-free service, McDonald‟s was it. We must simplify our operations if we expect to retain our credibility in terms of convenience and thus value. About 20% of our menu needs to go away and the first thing that should go is our espresso-based drinks. Fooling with customizing each sandwich may
be the future, but it should not be layered on top of what is already an incredible mess. Any
McDonald‟s manager or crewperson will tell you this, just ask them.

Anonymous said...

Not addressing the problems in the kitchen. Their solution is to grade harder not think smarter. The
number of Dollar Menu items per order is increasing, yet McDonald‟s consultants think you should still hit your service times. They need to go back to first grade math. The numbers don‟t work. The system was built on two sandwiches per order, yet most stores, particularly inner-city ones, have 6-8 Dollar Menu sandwiches per order. They need to find a workable solution not beat up on managers and operators. When you can‟t dazzle them with brilliance confuse them with BS. I think we need some changes from the top to the regional VPs before anything useful is going to change here. Time to get the shareholders involved with forcing this to happen. It seems the only way to increase sales by
their account is to build more stores because they can‟t get positive comp sales.