McDonald's 'mirror of Starbucks' is creating a nightmare for franchisees
In September, McDonald's announced it had added a new set of espresso-based drinks to the menu: the caramel macchiato, vanilla cappuccino, and americano.
In a survey of 27 McDonald's franchisees released by Nomura analyst Mark Kalinowski on Tuesday, only two franchisees said that the new beverages are beating sales expectations.
Meanwhile, seven said that the beverages are underselling, and 18 said that the drinks are selling in line with expectations.
Further, the new beverages were creating a long list of challenges, according to franchisees. Here are a few complaints:
- "Very time consuming, and competitors have a higher-quality product."
- "Forced equipment purchases, awful sales."
- "Getting them correct. There are too many ways to mess them up."
- "Slow ordering time, slow make time, and therefore slow service time. Very labor intensive."
- "Time-consuming products like this do not belong on McDonald's menu."
Three franchisees said that one positive aspect of the beverages is their similarity to Starbucks, with one franchisee calling them a "mirror" of the coffee giant's own drinks.
However, copying Starbucks creates a new set of issues.
Starbucks has been plagued with slower service times as it attempts to increase traffic while implementing new mobile ordering technology. People are willing to forgive some of Starbucks' fundamental flaws - like expensive drinks and slower service - because the chain has always marketed itself as being elevated above the average fast-food chain.
McDonald's, meanwhile, is the most iconic fast-food chain in the business. While it has attempted to boost its reputation over the last two years with various menu innovations, it doesn't have the same leeway that Starbucks has.
If McCafe drinks slow down service or force customers to pay more, customers are going to shop elsewhere - especially if McDonald's can't compete with Starbucks when it comes to quality or consistency.