McDonalds Offers Free Coffee to Get Back at Taco Bell


Breakfast menus are the new competition among American fast food restaurants. Taco Bell recently announced its breakfast menu and to promote it, the chain has come out with an in-your-face ad, which features many real-life Ronald McDonalds cheering the new breakfast line by Taco Bell. Needless to say the advertisement has gone viral, and McDonalds is smarting from the consequences! Therefore, to get back at Taco Bell – and douse its high-profile breakfast roll-out – McDonalds is now offering free coffee from March 31 to April 13.

McDonalds announced on Friday that it will give away small cups of McCafe completely free during breakfast hours in participating US outlets for two weeks, commencing Monday. The firm said that it is the first time they have participated in “a free coffee event.” The McCafe product line includes iced coffees and other drinks and debuted in the US in 2009.

Senior vice president of McDonald’s US menu innovation, Greg Watson, said that this freebie event would encourage new guests to try the McCafe coffee. He said McDonalds also wants its retaining customers to visit “a bit more often.” Watson further said the firm also hopes that once guests stop for the free coffee, they would grab a bite from their breakfast offerings to accompany their coffee.

McDonalds’ coffee drinks are hugely popular and have contributed significantly to its being a leader in breakfast food sales. The firm has cornered more than one-quarter of the fast food breakfast business for several decades. Nevertheless, the firm is now keen to maintain its leadership in breakfast food sales among fast food restaurants, even though, traditionally, McDonalds is a hamburger chain.

According to Technomic, the leading fact-based consulting and research firm serving the food industry, the breakfast food sales segment of fast food chains is a $50 billion business, so no wonder McDonalds is trying hard!

Meanwhile, freebies are usually a last resort for many firms. McDonalds announcing free coffee to get back at Taco Bell highlights the tough competition it is facing from rivals. The firm already has tough competition against coffee shop chains like Starbucks and Dunkin’ Donuts.

Earlier this month, Starbucks Corp. added a new espresso beverage and also expanded on its breakfast menu. Meanwhile, with a selection of food items targeting the health-conscious consumer, Dunkin’ Brands Group Inc. is also trying to carve out a niche in the breakfast market.

The introduction of Taco Bell’s new line-up in the same sector– which unlike McDonald’s conventional breakfast sandwiches, offers oddball items like poppable Cinnabon Delights and Waffle Tacos — is giving the firm an additional run for their money and leadership.

However, McDonalds’ tact to offer free coffee to get back at Taco Bell is just at the surface of its competition worries. The problems of the firm go deeper than breakfast. McDonalds CEO Don Thompson has said it is pivotal to improve the chain’s new product pipeline as the chain’s US sales slumped for the fourth consecutive month in February. The company is hopeful that it will maintain its leadership in breakfast food sales, but the same cannot be said for the rest of the restaurants menu items.

By Faryal Najeeb


24/7 Wall Street


USA Today

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