Starbucks And McDonald's Coffee Showdown

Newsweek:

Obama and Clinton. McCain and Romney. Call them the great contests of the week, if you must. But pound for (finely ground) pound, a more heated battle has been steadily percolating. It's morning in America, and that's steamed milk you hear. A latte war is brewing. The prize: venti-size profits in a U.S. specialty coffee market valued at $11 billion and growing.

On one side is Starbucks Corp., the Seattle-based coffee giant responsible for the democratization of the $3-$4 hot beverage. In hopes of reinvigorating a stock price that has floundered in recent years--this week it hovered around $20, about 40 percent less than the $36.60 it was trading at a year ago--Starbucks ousted its CEO, Jim Donald, this week, replacing him with Howard Schultz, the company's longtime chairman and the executive credited with making it the ubiquitous brand it is today. On the other side is McDonald's Corp., the Oakbrook, Ill.-based burger behemoth that feeds more people every day than any other restaurant brand in the world. The company announced a national rollout of the type of made-to-order coffee drinks that Starbucks brought to the fore.

Read the whole story: Newsweek

Comments

[independentrepublicrat]

This will be a championship fight because Micky D's can rival anyone with putting addictive chemicals into food. Starbucks owns chemical coffee dependency now but watch out...

[JSDKoeln]

Here in Germany, McDonalds has opened up many "McCafe's". It's kind of a starbucksesque room to the side of the main, tacky McD's fast food hell. I've had their coffee and believe me, McDont's is not starbucks. But then again, starbucks is definitely NOT Petes Coffee! Now that's the best coffee I've ever had from a chain. McD's is just the bottom of the barrell

[mommadona]

I don't do latte.
A BlackEye is more my weapon of choice.
(3 shots expresso in a tall French Roast).

Starbucks is nice on the road.
At home, I stick to my 'local havens'

[lacitepq]

There has been a lot of hype about how McDonalds is a threat to Starbucks, but I think its a bunch of crap. We are talking about a $2 - $3 item here. Is anyone who loves a good cup of coffee and prefers Starbucks going to start heading to McDonalds to save 40 cents? - I doubt it. Have we stopped buying SUVs b/c the the cost of a gallon of gas has gone up? No.
If you drink Coke and you walk into the local grocery story and Pepsi is on sale for 10 cents less will you buy Pepsi instead? Probably not. McDonalds will sell their coffee to their existing customer base (would you like a watery, ultra-sweet latte with that Big Mac, ma'am?) but I do not see Starbucks customers heading to McDonalds for their coffee - No way.

[VivaZapata]

the recession will eat into starbucks prominence far more than mcdonalds, who will also be marginalized by the good sense of people to start cooking again and leave fast food nation behind. mcdonald's makes a much better cup 'o java.

[Dendroica]

Starbucks has pretty much the same beans, directions, and machines from store to store, throughout the entire US and Canada. McD differs from region to region, store to store. Their "premium" coffee tastes pretty good in New England, and like bitter piss in New York. Made the mistake of trying it locally, and calling it "coffee" is misleading advertisement.

[wadenelson1]

McDonalds coffee has always had about the same quality as their food. Or worse.

Before their recent "surge" I recall twice dumping it; what they served was too horrible even to drink. Even with a pound of sugar added to it.

If Starbucks stock price has dropped that only means one thing: BUY!