Consumer Reports says that McDonald’s (MCD) coffee tastes better than Starbucks (SBUX). Starbucks stockholders better hope not, because McDonald’s is on a roll. While Starbuck has begun serving food, McDonald’s is expanding its coffee menu. It was just a matter of time before the two chains got in each others faces.
It is not that Starbucks is having any trouble selling coffee. It just announced a quarter on steroids. Revenue rose 22% to $2.4 billion, and same store sales were up 6%.
Ditto, McDonald’s. Fourth quarter profits doubled to $1.2 billion on an revenue increase of 11% to $5.6 billion. The company plans to open 800 stores this year.
Starbucks has stated that its long-term goal is to have 40,000 stores worldwide. McDonald’s is close to that number already. The more each grows, the more they will have to go after the same customers. And, physics tell us that people cannot be two places at once.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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