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McDonald's Java Ambitions Off To Slow Start

McDonald's has been rolling out new "gourmet" coffee products in an attempt to steal market share from Starbucks. But so far, according to data from a handful of test markets, the fast food giant is off to a slow start.

Specialty coffee sales in the company's test markets seem tepid-under 3% of sales per restaurant. Analysts take that as a bad sign, though McDonald's says otherwise. "It is absolutely to our expectations and actually a little greater,"" said Don Thomspon, president of McDonald's USA.

Becoming a recognized purveyor of up-market coffee is an important driver for McDonald's long-term growth and a way into a lucrative market dominated by Starbucks, say analysts and the restaurant. But it entails big risks for franchisees who must invest tens of thousands of dollars to accommodate the beverage blitz.

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