McDonald’s introduces CosMc’s, aiming to compete with Starbucks in the US

McDonald’s has unveiled plans for its new coffee-focused venture, CosMc’s, to enter the market segment dominated by Starbucks. The pilot location is set to open in Chicago this month, with plans to expand to around ten locations by the end of 2024. In parallel, the fast-food giant is set to open approximately 10,000 McDonald’s restaurants globally by 2027, emphasising significant growth, especially in China.

CosMc’s inaugural location will debut in Bolingbrook, Illinois, featuring a menu tailored to those with a sweet tooth. Offerings include items like the Churro Frappe and S’Mores Cold Brew, complemented by a condensed selection of McDonald’s staples like Egg McMuffins. The new brand derives its name from a McDonald’s mascot portrayed as an extraterrestrial entity with a penchant for the company’s food, featured in late 1980s and early 1990s advertisements.

While McDonald’s already operates the coffee and snack chain McCafe, CosMc’s targets a broader coffee-centric market, aiming to tap into Starbucks’ success. McDonald’s CEO, Chris Kempczinski, emphasised that although the new venture currently focuses on the US market, the company wouldn’t invest in an idea limited to a single region. The plan reflects McDonald’s acknowledgment of shifting consumer habits and the desire to diversify its offerings.

Simultaneously, McDonald’s is embarking on an ambitious expansion strategy, targeting 900 new restaurants in the US, 1,900 internationally in markets where it operates directly, and 7,000 in its international licenced markets. A significant portion of these additions, over half, is slated for China, the company’s second-largest market. McDonald’s sees substantial growth potential in China, recently acquiring greater control over its business in the region, with CEO Kempczinski envisioning China eventually becoming McDonald’s largest market.

Despite expressing caution about CosMc’s potential global expansion, McDonald’s remains focused on innovation and growth in response to changing consumer preferences and the evolving fast-food landscape.