McDonald’s to launch new chain in bid to compete with Starbucks

US News

McDonald’s is testing a coffee shop-style restaurant that puts it in competition with the likes of Starbucks.

It’s opening the first CosMc’s in Illinois this month – with the aim of having 10 in the US by 2024 – mainly in Texas to begin with.

CosMc’s is described as a “beverage-led concept” that’s “inspired by nostalgia” – and is named after a space alien character it introduced in the 1980s.

The company already has the McCafe coffee brand within existing McDonald’s, but the new stores take that further while also offering a larger menu of specialist drinks.

The firm showed off a sample of 13 drinks including a churro frappe, turmeric spiced latte and a blueberry ginger boost.

There will also be sweet snacks available and two of the most popular items from mainstream McDonald’s – the McFlurry and the Egg McMuffin.

McDonald’s said it would study the popularity of CosMc’s for at least a year before deciding whether to expand.

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Chief executive Chris Kempczinski said the new concept was intended to fill a sales slump its outlets normally see in the mid-afternoon.

“This is a $100bn category that’s growing faster than the rest of [casual dining] and with superior margins. And it’s a space that we believe we have the right to win,” he told an investors’ conference on Wednesday.

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McDonald’s also has ambitious plans for the core business and wants to open another 10,000 restaurants worldwide in the next four years – with the aim to hit 50,000 in total.

Starbucks, meanwhile, has big expansion of its own in the works.

Last month, it said it was aiming for 55,000 stores globally by 2030, up from 38,000 today.

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