While eyes recently have been on its all-day breakfast and Big Mac, McDonald’s Corp. has been solidifying its position as a major coffee-shop operator. New data from researcher Euromonitor show that McDonald’s 5,044 McCafé shops represent the third-largest coffee-shop brand globally. These are separate McCafé operations, popular in Europe and other international markets but still rare here.
The No. 1 position is still held by Starbucks, which operates 22,557 outlets and had $21.1 in 2015 sales, according to Euromonitor. UK brand Costa Coffee, owned by Whitbread PLC is second with 3,036 locations and $1.81 billion in sales. Euromonitor puts McCafé shop sales last year at $1.462 billion.
The first U.S. standalone McCafé was opened in Chicago in 2001. It didn’t last. McDonald’s opened its first McCafé outlet in Canada last December, in Toronto’s Union Station rail hub. A second opened in Toronto’s First Canadian Place skyscraper earlier this year.
Said Elizabeth Friend, Consumer Foodservice Strategy Analyst for Euromonitor International, says the coffee-shop market can expect to see more competition from smaller, local brands. “Competitive dynamics in the coffee shop market are changing. In emerging markets, this has meant an increasingly large number of brands competing for share, many of which are going to creative new heights to differentiate themselves. In developed markets competition has been increasing too, though in a slightly different form.
“In the US, competition has become a regional and even city-level game, with large numbers of independent, third-wave cafés and boutique chains like Blue Bottle Coffee and Intelligentsia popping up to compete with larger brands. Over the long-term, this kind of movement toward a highly diversified, highly fragmented, and most of all highly competitive global coffee shop market is only expected to continue. Operators all over the world have all taken note of the rapidly growing demand in coffee shops, and everyone is looking to get in on the opportunity before it’s too late.”