MCD – McDonald’s Coffee Is Driving Away Customers

A core competency is compromised

   

McDonalds185 MCD   McDonald's Coffee Is Driving Away CustomersMcDonald’s (MCD) has spent years offering new coffee products to compete with Dunkin’ Donuts (DNKN) and Starbuck’s (SBUX).

But the McCafe is starting to hurt business at McDonald’s, Howard Penney, managing director at Hedgeye Risk Management, tells Yahoo! Finance. 

“They went too far on the beverage initiative beginning in 2009 and really hurt the core business,” Penney tells Yahoo!. “They’re really losing customers at lunch and the stores are a little too inefficient because of the distractions they’ve put into the stores.”

Complicated drinks like Pumpkin Spice Lattes and Chocolate Chip Frappes are distracting employees from McDonald’s core business, Penney said.

“McDonald’s is known for food first, beverages second. Starbucks is known for beverages first, food second. Whenever you deviate from your core competency, something has to give,” Penney said. 

Perhaps simplicity could benefit McDonald’s by improving customer service. 

Wait times at McDonald’s drive-thrus are the longest in at least 15 years, according to a recent study by QSR Magazine.

McDonald’s told franchise owners earlier this year that one in five customer complaints are related to customer service, and that number is growing all the time, according to The Wall Street Journal.

 


Article printed from InvestorPlace Media, http://investorplace.com/2013/11/mcdonalds-mcd-sbux-coffee-dnkn/.

©2014 InvestorPlace Media, LLC

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