Okay, so McDonald's fired the first volley with the introduction of its premium coffee. And Starbucks - like many onlookers - was stunned at their success (and the immediate damage it inflicted on Starbucks). Now McDonald's is vowing to install coffee bars in its restaurants; clearly they have staked out new territory and are willing to do whatever is needed to take down their new adversary.
In the meantime, Howard Schultz has been reeling. Some might even argue that he got caught asleep at the wheel. Somehow I doubt that. This man is vigilant. He simply missed the signs.
The economy was slumping, the coffee craze was slowing down, the price of gas was rising, consumers were losing their jobs and BAM, the bottom drops out.
So what can you do? First you back off of your magazine and stop pushing books and videos in your stores. Then you begin offering lower priced drinks. Then you start closing stores. Then you realize you are in a war and you begin fighting back. But healthy breakfasts? Is this really a good brand move?
It is one thing to re-invent a company, but to openly admit that your food is "embarrassing" seems to send a bad signal. I have never ordered any food at Starbucks... and I am there every day. Starbucks is coffee. McDonald's is food (loosely defined). McDonald's can succeed because coffee is an extra, an add-on. But for Starbucks to add food, well that is a whole different thing.
I wish Starbucks the very best, and would not be the least bit disappointed if McDonald's loses this war, but something tells me that McDonald's has a better marketing plan than Starbucks does.
According to Starbucks, there is research that says I am wrong. Findings indicate that 75% of American consumers say they are willing to change their routine to get a convenient, healthy breakfast [apparently at Starbucks].
But I've got to tell you: I'm not loving it.
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