McDonald’s Corporation (NYSE:MCD), the world’s largest fast food chain operator, has a new strategy to strengthen its competitiveness and boost it sales—pour free coffee for breakfast.
Industry observers opined that McDonald’s Corporation (NYSEMCD) is offering free coffee in response to the brewing breakfast war particularly from Taco Bell’s new breakfast offering, bacon, sausage, and eggs, wrapped in a waffle with syrup.
According to McDonald’s Corporation (NYSE:MCD), it is the first time for the company to conduct a free McCafe coffee national event. The fast food chain giant will be offering free small cups of coffee during regular breakfast hours starting March 31 until April 13.
A way to encourage new guests to try McCafe coffee
Greg Watson, senior vice president, U.S. menu innovation at McDonald’s Corporation (NYSE:MCD) explained that the free coffee event is a new way for the company to encourage new guests to try McCafe coffee. The fast food chain giant is also hoping that customers who try its free coffee will eventually decide to order some of its breakfast offerings.
McDonald’s Corporation (NYSE:MCD) will host “Make Friends with McCafe sampling events at high-traffic locations and transportation hubs in multiple cities across the United States to kick off its free McCafe coffee national event. The company will also provide live musical performances and spontaneous comedy experiences during the sampling events.
Breakfast is a $50 billion business
Technomic estimated that breakfast is a $50 billion business. McDonald’s Corporation (NYSE:MCD) has dominated the breakfast market for decades and accounts more than 25% of the fast-food breakfast segment. However, the company is facing stronger competition from Taco Bell and Starbucks Corporation (NASDAQ:SBUX) among others.
Despite the growing competition in the fast food breakfast market, Technomic president Ron Paul believed that McDonald’s Corporation (NYSE:MCD) will be able to maintain its dominance. According to him, “So far, no one has been able to compete with McDonald’s at breakfast. Everyone is grabbing for a little bit of market share wherever they can get it.”
McDonald’s February sales performance
Earlier this month, McDonald’s Corporation (NYSE:MCD) reported that its global comparable sales declined 0.3% for the month of February. The company said its sales performance in the United Stated fell 1.4% in the United States and down 2.6% in Asia, Pacific, Middle East and Africa (APMEA). Its sales in Europe went up 0.6%.
McDonald’s president and CEO Don Thompson recently stated that the company is focused on improving its business performance by thoughtfully evolving its approach to ensure it is delivering the most compelling value, service and convenience to customer every day.
