McDonald's 'mirror of Starbucks' is creating a nightmare for franchisees (MCD)

pulse

October 17, 2017 7:46 PM

McDonald's new McCafe beverages are a "mirror of Starbucks," franchisees say — and that's causing some problems.

In September, McDonald's announced it had added a new set of espresso-based drinks to the menu: a caramel macchiato, a vanilla cappuccino, and an americano.

In a survey of 27 McDonald's franchisees released Tuesday by Mark Kalinowski, a Nomura analyst, only two franchisees said the new beverages were beating sales expectations.

Meanwhile, seven franchisees said the beverages were underselling, and 18 said they were selling in line with expectations.

Further, the franchisees said the new beverages were creating a long list of challenges. Here are a few of their complaints:

Three franchisees said one positive aspect of the beverages was their similarity to those at Starbucks, with one calling them a "mirror" of the coffee giant's drinks.

However, copying Starbucks creates a new set of issues.

Starbucks has been plagued with slower service times as it attempts to increase traffic to its stores while implementing new mobile-ordering technology. Some people, however, are willing to forgive some of Starbucks' fundamental flaws — like expensive drinks and slower service — because it has always marketed itself as being elevated above the average fast-food chain.

McDonald's, meanwhile, is the most iconic fast-food chain in the business. While it has attempted to boost its reputation over the past two years with various menu innovations, it doesn't have the same leeway as Starbucks. If the new McCafe drinks slow service or cost more, customers are likely to shop elsewhere — especially if McDonald's isn't able to compete with Starbucks' quality and consistency.

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