McDonald’s is opening its first US-based McCafe this week in downtown Chicago. After enjoying success with the concept abroad, the fast-food giant hopes to win over some of the US’ gourmet coffee crowd from Starbucks. If the concept works, hundreds more US McCafes could follow, helping boost flagging fast-food growth. But there’s a danger the young, trendy target audience will associate McDonalds too closely with burgers and fries.
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On Tuesday, while patrons of the adjacent McDonald’s lunched on the usual burgers and shakes, apron-wearing McCafe employees poured $2.49 cappuccinos and $1.40 espressos and served $2.59 tiramisu, $2.49 cheesecake and $1.59 muffins and scones in French bistro-style surroundings, in a final test run for today’s downtown Chicago opening.
If it takes off, it could be a great new thing for McDonald’s. It should complement the firm’s existing restaurants – but there’s competition from industry stalwarts such as Starbucks, Timothy’s and some individual cafes, from which it will be difficult to dislodge skeptical customers.
McCafe is the fast-food chain’s latest effort to beef up domestic sales, whose growth has shrunk as the fast-food market nears saturation point. Other recent innovations include new menu items, a prototype diner in Kokomo, Indiana, and adding such chains as Boston Market, Chipotle Mexican Grills and Pret A Manger.
However, the biggest obstacle to these efforts to reach a more upscale marketplace, characterized by young professionals in search of a trendy pick-me-up, is one of image. The McDonald’s name just isn’t associated with gourmet coffee and deserts. American consumers will find it hard to disassociate their thoughts from a mental picture of the Big Mac when buying a McCappuccino.
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By GlobalDataThere is also a risk that McDonald’s may be straying too far from its core offerings and confusing customers with its fast-changing image. Besides stiff competition, McDonald’s has been challenged lately by a decline in European sales due to fears about mad cow disease and by weak currencies affecting sales in its nearly 15,000 restaurants overseas.
Still, McDonald’s successfully operates nearly 300 McCafes abroad, including 52 in Australia, where the first one opened in 1993. It’s not likely to take very long before we know whether the concept can also attract and retain US consumers preened on morning lattes from Starbucks.
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