McDonald's eyes coffee for growth globally; Starbucks steps up food

NEW YORK, N.Y. – McDonald’s wants to be a bigger player in the global coffee business.

The world’s biggest hamburger chain on Thursday highlighted beverages as one of its key growth opportunities at a daylong presentation for investors.

McDonald’s CEO Don Thompson noted Thursday that coffee is one of the fastest growing categories in its global drinks business and noted that the company has less than its “fair share” of the market. When asked to identify competitors in the space, Thompson chose to keep the discussion broad.

“Anyone that stops off to get a cup of coffee anywhere, that’s an opportunity,” Thompson said at a daylong presentation for investors.

The push comes as Starbucks Corp. continues to enjoy strong sales growth, despite the lacklustre economy that other chains have blamed for underwhelming results. In the latest quarter, for example, Starbucks said global sales rose 7 per cent at locations open at least a year. At McDonald’s, the figure edged up 0.9 per cent.

This fall, McDonald’s added a pumpkin spice latte to its roster of McCafe coffee drinks; Starbucks has had a version for years. McDonald’s also recently said it’s partnering with Kraft Foods Group Inc. to test the sale of McCafe bagged coffee at retail locations such as supermarkets next year.

In the meantime, Dunkin’ Donuts and Starbucks are trying to boost food sales and attract more customers in the afternoon and evening hours. Starbucks recently revamped its sandwiches and introduced new salads and baked goods to become more of a lunch destination. About a third of purchases in the U.S. include food and Starbucks is looking to push that figure up.

But Starbucks CEO Howard Schultz doesn’t like comparisons to chains such as McDonald’s and Dunkin’ Donuts.

“They’re in another business — they’re fast-food,” Schultz said in an interview on CNBC earlier this year.

Overseas, McDonald’s also has about 4,200 separate McCafes that are either sectioned off from the main restaurant or stand-alone locations. McDonald’s says it plans to add another 350 to 400 such McCafe locations next year.

Still, Thompson stressed that McDonald’s remained in the restaurant business.

“We’re not trying to be something we’re not,” he said.


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