Blokes Down Under in Australia nicknamed it “Macca’s” but you’re more likely to hear “MickyD’s” or “the Golden Arches” bandied about as alternatives here in America.
Whatever your preferred slang name for it is, there’s no denying that McDonald’s is the biggest fast-food chain in the world.
And now McDonald’s is setting its sights on a surprising competitor.
McDonald’s spinoff launch is a rocket targeted straight at Starbucks
McDonald’s and Starbucks are the two largest fast-food chains in the country based on sales according to Nation’s Restaurant News, an industry publication.
Coffee has one of the highest profit margins in the restaurant industry.
And McDonald’s has tried to tap into the growing coffee market with its line of McCafe beverages.
Now the Golden Arches is coming directly for Starbucks with its new chain.
CosMc’s
McDonald’s announced that it was creating a spinoff chain of fast-food restaurants called CosMc’s.
CosMc’s has smaller storefronts that are focused on serving breakfast and serving a variety of beverages that seemed pulled from Starbucks’ playbook.
Customers can choose from drinks like cold brew coffee, frappes, cappuccinos, iced teas, lemonades, and slushes that can be customized to order.
Only a few items from the McDonald’s menu are sold like McMuffins and McFlurrys.
Locations have four drive-thru lanes, pickup windows, and no dining room.
McDonald’s CEO Chris Kempczinski explained the concept during an investor event last year.
“There is one more thing,” Kempczinski said. “CosMc’s.”
“What would happen if a McDonald’s character from the 1980s that was part alien, part surfer, part robot — what would happen if this character were to open a restaurant in 2023?” Kempczinsk wondered.
But there’s a good reason that McDonald’s is moving into Starbucks’ territory with an 80s robot alien surfer-inspired restaurant.
McDonald’s executive Jo Sempels said there’s a major opportunity for the company in the coffee market.
“Coffee is a very attractive category,” Sempels said. “It is large, highly profitable, growing quickly, and obviously with strong habitual behavior.”
Kempczinski explained the possibilities awaiting CosMc’s in a call with investors.
“This is a $100-billion category that’s growing faster than the rest of [fast food] and with superior margins. And it’s a space that we believe we have the right to win,” Kempczinski said.
CosMc’s debuts two more locations
The first test concept store for CosMc’s was in Bolingbrook, Illinois near McDonald’s corporate headquarters in suburban Chicago.
Now the spinoff has two more locations in the Dallas, Texas area, in Watauga and Arlington, that recently opened.
More locations are scheduled to open in Dallas and San Antonio this year as McDonald’s tests the concept.
CosMc’s is beginning to ramp up quickly after the concept was announced last year.
Now a coffee war with Starbucks could be on the horizon.