McDonald’s CosMc’s Is Gunning for Afternoon Coffee Sales. Starbucks Shouldn’t Worry, Analyst Says

McDonald’s new beverage-focused spinoff brand, CosMc’s, is expected to not pose much of a threat to Starbucks, according to equity research firm William Blair. The burger giant opened the first CosMc’s location in Bolingbrook, Illinois, as part of its experiment to capture consumers who want a customized pick-me-up drink in the afternoon. Nine more locations under the CosMc’s brand are slated to open by the end of 2024 in the Dallas-Fort Worth and San Antonio, Texas, metro areas as part of the pilot. CosMc’s focus on afternoon snacking and flavored coffee has spurred comparisons to Starbucks, which has focused on customizable cold coffee drinks, appealing to younger consumers, and having better profit margins. However, CosMc’s likely poses only a “relatively muted” threat to Starbucks and rival chain Dutch Bros., according to William Blair analyst Sharon Zackfia. CosMc’s menu items include cappuccinos and blueberry ginger boosts and aren’t much cheaper than Starbucks customers already pay for comparable drinks. McDonald’s executives said they’re unlikely to bring CosMc’s approach to the burger chain’s existing restaurants, as customizing drinks takes time, which would slow down McDonald’s service too much.

Read More @ CNBC

Suggested Reading