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McDonald's is in the midst of some big changes that show the changing tides in the world of fast food

Dan DeFrancesco   

McDonald's is in the midst of some big changes that show the changing tides in the world of fast food
  • This post originally appeared in the Insider Today newsletter.

Welcome back! Love can be found in many places… including outside the window of your high-rise apartment.

In today's big story, we're looking at some of the recent big changes at McDonald's, including the launch of a new restaurant concept.

What's on deck:

But first, I'm lovin' it.


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The big story

Golden launch

The most recognizable name in fast food is switching things up.

McDonald's is rolling out a new restaurant concept focused on cold, customizable beverages that's looking to compete with Starbucks.

CosMc's — a homage to an obscure McDonaldland character from the late 80s — opened its inaugural location in a Chicago suburb, Business Insider's Nancy Luna reports.

The Bolingbrook, Illinois, restaurant is the first of 10 scheduled to open by the end of 2024, with the rest coming to Texas.

The strategy for CosMc's, which is considered a pilot program, is to address the so-called "3 pm slump" fast-food chains face between lunch and dinner. It's a time slot that's been a sweet spot for beverage-focused chains like Starbucks, Nancy reports, thanks partly to their customizable, cold drinks.

Cold foam and oat milk are big business, as drink modifiers add up to roughly $1 billion in revenue for Starbucks.

And that's not the only change to the McDonald's "universe" — their term, not mine. The Golden Arches is supersizing its burgers and bringing back its once-beloved chicken wraps after competitors pushed into the snack-wrap space earlier this year.

McDonald's changes come amid an interesting time for fast-food chains.

Inflation has hit the industry hard, making the once-affordable food option a lot more pricey. McDonald's dollar menu isn't even a thing anymore. Things have gotten so bad you're better off cooking at home again.

And then there's the "Ozempic effect." The buzzy weight-loss drug has some worried that customers' appetite for fast food might dry up — even if those fears are unfounded.

Which is why launching a beverage-focused chain is such an interesting play. Call it "beverage math," but when it comes to drinks, I don't tend to scrutinize their price the same way I would a full meal. And fast-food beverages are typically a high-margin item for chains, Nancy told me.

CosMc's could also be a bid for McDonald's to boost its app and loyalty program. McDonald's app has grown over the years, with over 57 million active members, but it still leaves much to be desired. (Nancy reviewed all the top chain apps.)

Starbucks, meanwhile, is the industry's gold standard. The app accounts for over a quarter of the US company store transactions.

And it's not just driving business. Starbucks' app essentially functions as the world's largest unregulated bank. It has billions of dollars deposited on gift cards that amount to an interest-free loan for the company. (Jamie Dimon could never.)

To be sure, 10 CosMc's is not even a drop in the bucket of McDonald's 40,000-plus restaurant empire. But it's not hard to see how CosMc's could quickly become a key part of the ubiquitous chain.


Your Monday headline catchup

A quick recap of the top news from over the weekend:


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In other news


What's happening today

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  • Hollywood's list of the best that never was. The Black List, a collection of the best unproduced screenplays as voted on by studio executives, is released today. Alums of the list include "Argo," "Slumdog Millionaire," and "Whiplash."


The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York.



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