- Mariko Oi & Natalie Sherman
- BBC News
McDonald’s has announced details of its new retro-style restaurant concept, CosMc’s, which will operate in the same market segment as Starbucks.
The pilot store, which focuses on hot and cold specialty drinks, opened in the Chicago area this month and aims to expand to 10 stores by the end of 2024.
Meanwhile, the fast food giant plans to open about 10,000 McDonald’s restaurants around the world by 2027, many of them in China.
The expansion will increase the number of stores to approximately 50,000.
The first CosMc’s is scheduled to open later this week in Bolingbrook, Illinois, near the fast-food giant’s headquarters, and about 10 other locations are expected to open in Texas next year.
The concept is the fast food chain’s latest move to tap into the lucrative coffee market, especially in the United States, where more than 60% of Americans drink at least one cup a day.
“This is a very important category that McDonald’s hasn’t tapped into properly in the U.S.,” said Jeffrey Young, founder of Allegra World Coffee Portal, a coffee research consultancy. “The question is: Is this a reliable approach?”
“Another world” experiment
The new brand’s name comes from McDonald’s Land’s mascot, a food-craving alien from outer space that appeared in advertising in the late 1980s and early 1990s.
The menu appears to be aimed at those with a sweet tooth, with offerings like churro frappe, a type of Spanish donut, and biscuit, chocolate, and marshmallow s’mores cold brew.
The company also promises customers the opportunity to customize their drinks with popping boba bubbles and flavorful syrups to create “otherworldly” drinks.
A small number of McDonald’s classics, such as the Egg McMuffin, will also be available.
Serra Senatore, senior analyst at Bank of America, said it’s unclear why McDonald’s thought it made more sense to launch another brand than just expand the menu at existing stores. .
“Maybe you can bring in new customers who might not have considered McDonald’s, but it’s hard to establish a new brand,” she says.
McDonald’s already has a coffee and snack chain called McCafé, which only serves coffee and sweets, cakes and pastries.
It has had its greatest success outside the United States and ranks as Australia’s best-selling beer. According to Mr Young, it is also the UK’s second largest coffee retailer after Costa.
But Young said McDonald’s has struggled to establish “coffee credibility” in the United States.
A 2008 plan to introduce baristas and espresso machines to U.S. restaurants was not completely accepted. Another effort about a decade ago had mixed results.
Mr. Senatore said the growing popularity of drive-through grab-and-go coffee shops may have convinced McDonald’s, the drive-through specialist, to try again.
The move comes as rising prices have drawn shoppers to cheaper fast food such as McDonald’s for their treats, while legions of social media users on apps like TikTok are now shopping for a variety of drinks at coffee shops. This is partly because people are jumping on the trend of posting unique drink combinations made using . cream, sprinkles, syrup, etc.
McDonald’s boss Chris Kempczinski stressed that investors shouldn’t get too excited about CosMc’s, but said CosMc’s could expand globally.
“It’s not worth your time to develop an idea that only works in one market,” he says.
Coffee shops are soaring in popularity in China, a country key to the company’s growth plans.
The latest expansion includes 900 new restaurants in the U.S., 1,900 in international markets that operate their own restaurants, and 7,000 in international licensed markets.
The fast food giant said this could be the “fastest-ever” growth period for its burger business.
More than half of the 7,000 additional units will be sold in China, the chain’s second-largest market. The company recently signed a deal that will give it greater control over its operations in the region.
Kempczinski said China could eventually become McDonald’s biggest market.
But the company said it was also seeing the impact of ongoing conflicts in the Middle East.
The BBC reported that workers as young as 17 were molested and harassed on an almost daily basis.
In response, McDonald’s said it was “not good enough” and “deeply apologized.”