Despite McDonald's massive advertising efforts for its McCafé specialty coffee launch, the chain doesn't seem to have grabbed too many actual Starbucks customers, according to a story by Reuters. Instead, each brand has its own niche.
From Reuters:
Research from YouGov Plc's BrandIndex shows that McDonald's is the hands-down winner on value perception while Starbucks has a substantial lead in quality perception.
"It's two completely different customers. There aren't too many people who meet for business meetings in McDonald's," said William Smead, chief investment officer at Smead Capital Management in Seattle, which owns about 325,000 shares of Starbucks and 60,000 shares of McDonald's across all accounts.
McDonald's has maintained that its McCafé line is not designed to compete with Starbucks beverages. Instead, the company is trying to grab its own share of the specialty beverage market. As part of that effort, McDonald's also is testing smoothies and frappes, which should launch sometime next year.
Starbucks CEO Howard Schultz said in the company's latest earnings call that it has actually benefitted from McDonald's McCafé promotions by attracting increased awarenss to the coffee category overall.
According to the story by Reuters, analysts have a different take on the situation, saying Starbucks own value push boosted sales.
