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Dec 06, 2007 -- Will McCafe pummel Starbucks?

Clark does not drink coffee. Yet he's fascinated by people who spend a lot of money at Starbucks. Clark's wife now has their 8 year old daughter hooked on going to Starbucks for non-caffeinated Frappuccinos. But the Seattle-based java giant is for the first time ever experiencing declining sales. Why? Are they too expensive? Not really, according to Clark. This is a classic case of imitation being the sincerest and cruelest form of flattery. Starbucks is facing competition from some unusual suspects like McDonald's! Years ago, Clark went to an experimental McD's in Raleigh, N.C. The store was divided into a McCafé and a standard McD's. The McCafé had bistro tables, a fountain and fancy coffees and pastries on the menu. Clark wondered, "Is this really going to work?" Today there are about 800 McCafés across the nation. They offer vanilla lattes, Café mochas, caramel cappuccinos, iced coffees and other frou-frou drinks -- all cheaper than Starbucks. Look for national TV advertising from Starbucks to fight back against its new competitor. Starbucks had a great infancy, but they're poised for a tough adolescence.

Even Consumer Reports says McD's coffee is the best from any chain -- better than even Starbucks. But Clark's executive producer Christa still thinks coffee from Dunkin' Donuts is tops. She's been buying big packs of D&D coffee at the warehouse clubs. If you're not a member of a warehouse club, you're better off buying your bagged D&D coffee in bulk at a D&D location, not a grocery store. Meanwhile, Christa has some homework. Clark has asked her to figure out the cost per cup when you buy it in bulk at a warehouse club vs. purchasing it cup-by-cup at a store.

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What others are saying

  • McCafe at McDomalds.
    The Latte and Cappuccino are good but not on the par of Starbucks. They are not quite as tasty and the staff there does not know how to make them sometimes. and once they mixed regular coffee with the expresso. It is cheaper. But I still like Starbucks.

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