• The Wall Street Journal, Monday, January 7, 2008 11:45 AM

Starting this year, McDonald's nearly 14,000 U.S. locations will install coffee bars with "baristas" serving cappuccinos, lattes, mochas and the Frappe, similar to Starbucks' ice-blended Frappuccino. Hailing from very different corners of the restaurant world, the chains have gradually encroached on each other's turf.

The growing overlap shows how convenience has become the dominant force shaping the food-service industry. Consumers who are unwilling to cross the street to get coffee have pushed all food purveyors to adapt the strategies of fast-food chains. It also shows how the chains' efforts to adapt have had drastically different results on their bottom lines. McDonald's is entering the sixth year of a successful turnaround, while Starbucks has begun to struggle.

McDonald's franchisees say they think the new coffee drinks will be particularly helpful in drawing young consumers who prefer them to drip coffee. But the new coffee program could slow down operations and alienate customers who come to McDonald's for cheap, simple fare rather than theatrics. Franchisees say that many customers don't know what a latte is.

Read the whole story at The Wall Street Journal »