McDonald's Sets Out to Increase 'Coffee-Driven Visits'

OAK BROOK, Ill. – McDonald's Corp. is prioritizing "coffee-driven visits" in order to boost U.S. sales over the next few years, according to a report by Bloomberg.

During a webcast earlier this month, the company touched on ambitions of becoming the envy of its rivals and referred to Starbucks Corp. as leading the "coffee wars." Additionally, in a recent memo that outlined McDonald's 2014-2016 strategy, U.S. Operations Chief Jim Johannesen and U.S. Brand Chief Kevin Newell encouraged franchisees to provide "a gold-standard cup of coffee with every visit."

Until late February, these visits can include the purchase of a limited-edition McCafé chocolate-covered strawberry frappe, one of several seasonal coffee beverages the company has offered at a lower price point than Starbucks.

This focus on coffee comes as increased competition from other fast-food restaurants, c-stores and other foodservice retailers contributed to McDonald's 1.4-percent decline in same-store sales during the fourth quarter of 2013. It also comes five years after the launch of the McCafé menu, and in the meantime, the costs of adding espresso machines and remodeling restaurants to Starbucks-like cafés have reportedly been unpopular with franchisees.

In 2013, McDonald's comparable-store sales in the U.S. fell 1.7 percent at lunch, and snack and dinner sales also slid, according to the webcast. However, breakfast sales rose 1.6 percent.

The company is attempting to draw customers back into its restaurants with a new ad campaign that urges them to "Make the most of breakfast with McCafé." New interior store decoration also reinforces the idea of quality McDonald's coffee through graphics and slogans.

McDonald's also began selling packaged ground and whole-bean coffee in grocery stores, a move that President and CEO Don Thompson referred to last year as a reminder to visit a McDonald's restaurant, according to the report.

McDonald's franchisee Terry Smith, owner of three Vermont locations, told the news outlet that most Americans don't think of the chain as a destination for specialty hot beverages, but that they become "addicted" after trying them. He also voiced approval of McDonald's increased emphasis on breakfast and the McCafé brand.

"As always, our priority is to provide our customers a great restaurant experience," McDonald's spokeswoman Lisa McComb said in an email. "Serving an exceptional cup of coffee along with great-tasting food has been, and will continue to be, a strong area of focus for us."

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