McDonald's Counts on Coffee to Boost Sales
(NEW YORK) -- McDonald's is looking to coffee to help increase its sales in the United States. The food chain prioritizes delivering "a gold-standard cup of coffee with every visit," as detailed in a memo obtained by Bloomberg. The memo outlines the company's strategy for 2014 to 2016 and detailing that the chain hopes to rival coffee retailers.
In a webcast for restaurant owners, they said they wanted to be the "envy" of competitors and that Starbucks was leading the "coffee wars." Howard Penny, managing director at Hedgeye Risk Management LLC, tells Bloomberg that McDonald's is trying to look and feel more like Starbucks, bringing them into territory that may hurt them in the long run since their focus is on food, not beverages.
Earlier in January, the fast-food chain reported profits were stagnant and same-store sales in the U.S. fell 1.4 percent in the fourth quarter. Nearly five years ago, the company launched its McCafe menu, which offers cappuccino, lattés, and iced and hot mocha.
The options provide a quick, cheap caffeine fix for consumers, but many franchises were reluctant to be part of McDonald's initial plan, which included pricey remodeling costs and espresso machines to transform the restaurants into locales that emulated the cafe experience.
Copyright 2014 ABC News Radio