# data[].attributes.body
It was so interesting reading everyone's stance on this subject. I like that you integrated the current PR state of Starbucks to add to the argument. After doing my own research on these racist incidents, I myself had a bit of trouble stepping into a Starbucks. However, few days after the incident Starbucks took a huge pause and conducted mandatory trainings for all 175,000 employees across 8,000 locations. I thought they did well in adapting to negative press. Mcdonald's has suffered their own flurry of PR debacles and have just recently gained back their consumers. I'm an absolute coffee lover, but there are so many competitors out there I had to reconsider my options a bit.

# data[].attributes.headline
McDonald's Coffee is giving Starbucks a run for its money.

# data[].attributes.subject
McDonald's Coffee is giving Starbucks a run for its money.

# data[].attributes.body
I agree that McDonald's coffee is giving Starbucks a run for its money. It seems like Starbucks is losing customers lately while McDonalds is gaining new ones. The more expensive drinks at Starbucks, recent changes in membership cards and policies, and unsuccessful happy hour campaigns have drove people away. Also, there has been racist incidents the past 6 months that attracted negative attention and criticism towards Starbucks. I think all this impacted the success of McDonalds. McDonalds used the perfect timing to start offering coffee and different drinks very similar to Starbucks at a lower price. Also, the drive through option at McDonalds and the amount of locations helped. Starbucks get to come up with a really smart solution before McDonalds becomes completely the new place to be for coffee too.

# data[].attributes.body
Mcdonald's drive thru is offered at more McDonald's locations than Starbucks. This influences the frequency of customer visits when they can simply drive by rather than going into a Starbucks location for coffee, which they are more likely to. More customers use McDonald's drive thru than they do Starbucks drive thru. Convenience gives McDonald's a competitive edge when selling similar products to Starbucks.

# data[].attributes.headline
McDonald’s Wants to Be the New Starbucks

# data[].attributes.subject
McDonald’s Wants to Be the New Starbucks

# data[].attributes.body
For McDonald’s, which has seen a decline in foot traffic, the revamped McCafe offers a chance to attract customers accustomed to upscale coffee drinks. To draw customers away from its competitors, McDonald’s will highlight its price advantages over Starbucks with offers including $1 drip coffee and $2 small specialty beverages over the first quarter of next year.

# data[].attributes.attachment_link.title
McDonald's Wants to Be the New Starbucks

# data[].attributes.attachment_link.description
McDonald's is challenging Starbucks and Dunkin' Donuts in an effort to attract more coffee enthusiasts

# data[].attributes.headline
McDonald's 'mirror of Starbucks' is creating a nightmare for franchisees

# data[].attributes.subject
McDonald's 'mirror of Starbucks' is creating a nightmare for franchisees

# data[].attributes.body
Starbucks has been plagued with  slower service times as it attempts to increase traffic to its stores while implementing new mobile-ordering technology. Some people, however, are willing to forgive some of Starbucks' fundamental flaws — like expensive drinks and slower service — because it has always marketed itself as being elevated above the average fast-food chain.

McDonald's, meanwhile, is the most iconic fast-food chain in the business. While it has attempted to boost its reputation over the past two years with various menu innovations, it doesn't have the same leeway as Starbucks. If the new McCafe drinks slow service or cost more, customers are likely to shop elsewhere — especially if McDonald's isn't able to compete with Starbucks' quality and consistency.

# data[].attributes.attachment_link.readable_text
McDonald's new McCafe beverages are a "mirror of Starbucks," franchisees say - and that's causing some problems.

In September, McDonald's announced it had added a new set of espresso-based drinks to the menu: a caramel macchiato, a vanilla cappuccino, and an americano.

In a survey of 27 McDonald's franchisees released Tuesday by Mark Kalinowski, a Nomura analyst, only two franchisees said the new beverages were beating sales expectations.

Meanwhile, seven franchisees said the beverages were underselling, and 18 said they were selling in line with expectations.

Further, the franchisees said the new beverages were creating a long list of challenges. Here are a few of their complaints:

"Very time consuming, and competitors have a higher-quality product."

"Forced equipment purchases, awful sales."

"Getting them correct. There are too many ways to mess them up."

"Slow ordering time, slow make time, and therefore slow service time. Very labor intensive."

"Time-consuming products like this do not belong on McDonald's menu."

Three franchisees said one positive aspect of the beverages was their similarity to those at Starbucks, with one calling them a "mirror" of the coffee giant's drinks.

Advertisement

However, copying Starbucks creates a new set of issues.

Starbucks has been plagued with slower service times as it attempts to increase traffic to its stores while implementing new mobile-ordering technology. Some people, however, are willing to forgive some of Starbucks' fundamental flaws - like expensive drinks and slower service - because it has always marketed itself as being elevated above the average fast-food chain.

McDonald's, meanwhile, is the most iconic fast-food chain in the business. While it has attempted to boost its reputation over the past two years with various menu innovations, it doesn't have the same leeway as Starbucks. If the new McCafe drinks slow service or cost more, customers are likely to shop elsewhere - especially if McDonald's isn't able to compete with Starbucks' quality and consistency.

# data[].attributes.attachment_link.title
McDonald's 'mirror of Starbucks' is creating a nightmare for franchisees

# data[].attributes.attachment_link.description
McDonald's new McCafe beverages are a "mirror of Starbucks," franchisees say - and that's causing some problems. In September, McDonald's announced it had added a new set of espresso-based drinks to the menu: a caramel macchiato, a vanilla cappuccino, and an americano.

# data[].attributes.headline
McDonald’s may gain fresh hangout status as Starbucks is rocked by video

# data[].attributes.subject
McDonald’s may gain fresh hangout status as Starbucks is rocked by video

# data[].attributes.body
"Starbucks Corp. has left many Americans behind. McDonald's Corp. may be positioned to pick up the pieces."

# data[].attributes.attachment_link.readable_text
In the late 1990s, Starbucks teamed up with Magic Johnson Enterprises to invest in stores in underserved neighborhoods. The partnership ended in 2010, but after the demonstrations in Ferguson, Mo., in 2015, the company recommitted to opening cafes in poor urban neighborhoods, and has opened 10 in cities including Chicago and Trenton, N.J., and says it's planning another in Birmingham, Ala., this summer.

# data[].attributes.attachment_link.title
McDonald's may gain fresh hangout status as Starbucks is rocked by video

# data[].attributes.attachment_link.description
In the late 1990s, Starbucks teamed up with Magic Johnson Enterprises to invest in stores in underserved neighborhoods. The partnership ended in 2010, but after the demonstrations in Ferguson, Mo., in 2015, the company recommitted to opening cafes in poor urban neighborhoods, and has opened 10 in cities including Chicago and Trenton, N.J., and says it's planning another in Birmingham, Ala., this summer.

# data[].attributes.headline
Is McDonald's Really the Cause of Starbucks' Poor Showing?

# data[].attributes.subject
Is McDonald's Really the Cause of Starbucks' Poor Showing?

# data[].attributes.body
While Starbucks reported below-average growth globally, in its biggest market, the U.S., it saw a 6.9% increase in net sales on a less-than-expected 2% increase in comparable-store sales. Since higher ticket prices accounted for the entire gain, that means the coffee shop wasn't getting any more customers into its stores, even with the continued expansion of food into its restaurants. In contrast, McDonald's is attracting customers.

# data[].attributes.attachment_link.readable_text
(( Starbucks NASDAQ:SBUX) has blamed a lot of things for the slowdown in its U.S. business: Limited-time offers didn't resonate with customers; they weren't buying merchandise and gift cards; more people were shopping online; changes to its loyalty program were unpopular. One thing that didn't take the blame was McDonald's NYSE:MCD) -- though maybe it should have.

A morning jolt

While Starbucks reported below-average growth globally, in its biggest market, the U.S., it saw a 6.9% increase in net sales on a less-than-expected 2% increase in comparable-store sales. Since higher ticket prices accounted for the entire gain, that means the coffee shop wasn't getting any more customers into its stores, even with the continued expansion of food into its restaurants.

In contrast, McDonald's is attracting customers. In fact, for the first time in four years, the burger chain recorded its first full-year increase in guest counts. CEO Steve Easterbrook had estimated McDonald's had lost 500 million customers over the previous four years, and it was the restaurant's mission to regain them. By finally concentrating on the value end of its menu, he has seen customers respond, and now store traffic was 1% higher in the U.S. in 2017, and nearly 2% higher worldwide.

McDonald's said it was because it was concentrating once more on what its core customer was looking for that it's growing once again.

"In the U.S., fourth-quarter comparable sales increased 4.5% as a result of strong performance of core menu items featured under the McPick 2 platform and beverage value," the company stated.

Starbucks, on the other hand, continues to have delusions of grandeur and is suffering as a result.

Food for thought

Starbucks recently began introducing high-end bakeries into its pricey Roastery restaurants under the Princi name. The one it opened in Shanghai is reportedly raking in more in one day than what a typical Starbucks makes in a week, and it plans on greatly expanding the concept as it goes forward as a result, but there's still good reason to believe the more the coffeehouse pushes food and the less its coffee plays a central role, the more the difficulties exhibited in its results this quarter will continue, despite the 2% gain in food comps versus a 1% gain in beverages.

It seems to be a risky strategy to be counting on high-end bakeries, tchotchkes you sell in the lobby, and hopefully hitting upon the next unicorn frappuccino to make your quarterly sales goals.

In fact, McDonald's may be beating Starbucks at its own game. It recently began offering cappuccinos, mocha, and macchiatos at its restaurants for only $2 under its popular McCafe line of beverages. That may mean Starbucks is losing customers who are looking for a value version of their favorite drinks.

Contents may be hot

Starbucks is never going to be McDonald's and vice versa, nor should they seek to swap places. The latter tried once by pursuing millennial consumers and saw its sales crater. Only when it reversed course and took its core menu and customer to heart did it succeed in turning around.

If Starbucks tried to become a fast-food outlet, it would probably experience similar results. Yet by going after this high-end ideal, it's leaving behind its core customer who comes in looking for a good cup of coffee and a bit of food. Increasingly, that's being found more at McDonald's, which is siphoning off Starbucks' more price sensitive customers with aggressive marketing of its coffee. When Starbucks boasts about expanding its Reserve bars where coffee sells for $10 a cup, McDonald's is going to win.

Certainly, food can and should be a component of Starbucks' menu, and if it can find the right mix it ought to be able to establish a growth trajectory once more. But its track record in this regard has been not been good, and by ignoring its coffee in favor of baked goods, there may be more painful lessons yet to learn.

# data[].attributes.attachment_link.title
Is McDonald's Really the Cause of Starbucks' Poor Showing? | The Motley Fool

# data[].attributes.attachment_link.description
(( Starbucks NASDAQ:SBUX) has blamed a lot of things for the slowdown in its U.S. business: Limited-time offers didn't resonate with customers; they weren't buying merchandise and gift cards; more people were shopping online; changes to its loyalty program were unpopular. One thing that didn't take the blame was McDonald's NYSE:MCD) -- though maybe it should have.

# data[].attributes.headline
The world's biggest coffee chain has been struggling with decelerating same-store sales in its dominant U.S. market and weakness in the afternoon and evening hours

# data[].attributes.subject
The world's biggest coffee chain has been struggling with decelerating same-store sales in its dominant U.S. market and weakness in the afternoon and evening hours

# data[].attributes.attachment_link.readable_text
Starbucks will not run its Frappuccino Happy Hour special this summer.

The chain has blamed its Frappuccino promotions for its disappointing holiday sales.

Starbucks will be taking a "different approach" to its summer offerings.

LOS ANGELES (Reuters) - Starbucks Corp has told employees it is taking its Frappuccino Happy Hour special off the menu in the United States this summer, as it shakes up its promotions in a bid to strengthen sales after a disappointing holiday season.

The world's biggest coffee chain has been struggling with decelerating same-store sales in its dominant U.S. market and weakness in the afternoon and evening hours - and has put some of the blame on its Frappuccino promotions.

"As part of our updated approach to products, events and offers, a different approach to summer offers will be planned that does not include Happy Hour," the coffee chain said in its recently released Spring Partner Planning Kit for U.S. employees.

Company spokeswoman Haley Drage confirmed the language in the communication to employees but said Starbucks is not canning Frappuccino Happy Hour. She declined to elaborate. Starbucks for several years has offered some form of Frappuccino Happy Hour, which is popular with customers but not baristas.

Frappuccinos are sweet, icy, blended drinks that are more labor-intensive than many of the company's other beverages. Last year's U.S. promotion offered half-priced Frappuccinos from 3 p.m. to 6 p.m., from May 5 to May 14.

That special resulted in "a lower-than-expected lift in nondiscounted Frappuccino beverages following Happy Hour," Chief Financial Officer Scott Maw said on a conference call with analysts in July 2017.

Executives told analysts last week that Starbucks' cafe sales in Japan are being weighed down by softness in limited-time offers, particularly on Frappuccino drinks.

On Thursday, Starbucks warned that 2018 global same-store sales growth would be at the low end of its forecast, after holiday merchandise and limited-time seasonal drinks fell flat with U.S. customers during what is traditionally a blockbuster year-end quarter.

Chief Executive Kevin Johnson said Starbucks' strategy for boosting sales includes focusing on drinks such as iced coffee, tea, cold brew and draft beverages such as Nitro Cold Brew, which are more popular in the afternoon. To that end, Starbucks is speeding up the roll-out of its hipster Nitro Cold Brew to 2,300 stores in the United States by the year from 1,300 stores currently. Nitro coffee, which looks like dark beer, is infused with nitrogen gas, stored in a keg and served from a tap.

Starbucks has nearly 14,200 cafes in the United States. Analysts worry it is also being pressured by stepped-up competition and some are concerned it is opening too many new cafes in the United States.

# data[].attributes.attachment_link.title
Starbucks will end a Frappuccino promotion that baristas hate

# data[].attributes.attachment_link.description
Starbucks will not run its Frappuccino Happy Hour special this summer. The chain has blamed its Frappuccino promotions for its disappointing holiday sales. Starbucks will be taking a "different approach" to its summer offerings.

# data[].attributes.headline
McDonald's could be cutting into Starbucks' sales, according to a note from Bernstein analysts.

# data[].attributes.subject
McDonald's could be cutting into Starbucks' sales, according to a note from Bernstein analysts.

# data[].attributes.attachment_link.title
McDonald's 'cheap coffee' could be stealing customers from Starbucks when it needs them most

# data[].attributes.attachment_link.description
McDonald's may be taking share away from Starbucks, Bernstein analysts wrote in a note to investors. However, the fast-food chain isn't necessarily stealing the customers looking for a cheap cup of coffee in the morning. Instead, McDonald's is taking afternoon customers.

# data[].attributes.body
Mcdonald's CSR

# data[].attributes.attachment_link.title
McDonald's Values, Sustainability, & Quality | McDonald's

# data[].attributes.attachment_link.description
Our values include making quality food, practicing sustainable sourcing, and committing to a healthier planet. Learn more.

# data[].attributes.body
Public perceptions of Starbucks could influence consumer choice. posted by Kevin

# data[].attributes.attachment_link.readable_text
Interested in Starbucks?

Add Starbucks as an interest to stay up to date on the latest Starbucks news, video, and analysis from ABC News.

Turning away customers looking for an afternoon jolt of caffeine, thousands of Starbucks shops across the U.S. closed early on Tuesday to hold training for employees on recognizing hidden prejudices.

It was part of the coffee chain's effort to deal with the outcry over the arrest of two black men last month for sitting in a Philadelphia Starbucks without buying anything.

After the incident, the company's leaders apologized, met with the men and scheduled an afternoon of training for 175,000 employees at more than 8,000 U.S. stores.

Self-described loyal Starbucks customer Darnell Metcalf, a 55-year-old black man from Miami, said he was dubious about how much a four-hour training session might accomplish for employees "raised to look at certain people a certain way and act a certain way."

And he said the problem is not confined to Starbucks, but exists at plenty of other retail chains where he has seen people profiled.

"It makes it look like they're trying to, you know, quiet the storm," Metcalf said outside a closed-for-training Starbucks. "They're not solving nothing. They're not going to fix this overnight. ... It's not Starbucks the corporation. It's only certain employees who are like that."

Starbucks has not said how much the training will cost the company or how much money it expects to lose from closing the stores during what is usually its least busy time of day.

"It's quite expensive," Chairman Howard Schultz said Tuesday. "We've had certain shareholders call and say, 'How much is this going to cost and how do you justify this?' My answer to them was simply: We don't view it as an expense. We view it as an investment in our people and the long-term cultural values of Starbucks."

At the company's famous Pike Place Market location in Seattle, commonly referred to as the original Starbucks, the store stopped letting people in at 1 p.m.

Trina Mathis, who was visiting from Tampa, Florida, was frustrated that she couldn't get in to take a photo but said the shutdown was necessary because what happened in Philadelphia was wrong.

"If they haven't trained their employees to handle situations like that, they need to shut it down and try to do all they can to make sure their employees don't make that same mistake again," said Mathis, who is black.

Others visiting the store questioned whether the training would make a difference or suggested it was overkill.

Anna Teets, who lives in Washington state, said the problem has been fixed and the company has dealt with the situation. "It's been addressed," she said.

Inside the closed Starbucks Reserve store on the ground floor of the company's corporate headquarters in Seattle, about two dozen people could be seen through the window. Some held white pamphlets with the words: "What makes me, me? And you, you?"

The training, developed with help from the NAACP Legal Defense and Education Fund and other groups, was not mandatory, but Starbucks said it expected almost all of its employees to participate. It said they will be paid for the full four hours.

Training in unconscious, or implicit, bias is used by many corporations, police departments and other organizations. It is typically designed to get people to open up about prejudices and stereotypes - for example, the tendency among some white people to see black people as potential criminals.

Many retailers, including Walmart and Target, say they already offer some racial bias training. Nordstrom has said it plans to enhance its training after apologizing to three black teenagers in Missouri who were falsely accused by employees of shoplifting.

In the Philadelphia incident, Rashon Nelson and Donte Robinson were asked to leave after one was denied access to the bathroom. They were arrested by police minutes after they sat down to await a business meeting.

The arrest was recorded by cellphone and triggered protests, boycott threats and debate over racial profiling, or what has been dubbed "retail racism." It proved a major embarrassment for Starbucks, which has long cast itself as a company with a social conscience.

Nelson and Robinson settled with Starbucks for an undisclosed sum and an offer of a free college education. They also reached a deal with the city of Philadelphia for a symbolic $1 each and a promise from officials to establish a $200,000 program for young entrepreneurs.

Starbucks said the arrests never should have occurred. It has since announced anyone can use its restrooms, even people not buying anything.

Some black coffee shop owners in Philadelphia are suggesting black customers instead make a habit of patronizing their businesses.

Amalgam Comics and Coffeehouse owner Ariell Johnson said she has called the police just once in the two years she has been open. She said that should happen only when there is a provocation or danger.

Calvin Lai, an assistant professor of psychological and brain sciences at Washington University in St. Louis, said people should not place high expectations on this one day.

"We find that oftentimes diversity training has mixed effects, and in some cases it can even backfire and lead people who are kind of already reactive to these issues to become even more polarized," Lai said.

One afternoon wouldn't really be "moving the needle on the biases," especially with a company that has as many employees as Starbucks, he said. "A lot of those employees won't be here next year or two years or three years down the line."

Starbucks has said the instruction will become part of how it trains all its workers.

---

Associated Press reporters Phuong Le and Elaine Thompson in Seattle, Lynne Sladky in Miami, Mark Gillespie in Cleveland and Errin Haines Whack in Philadelphia contributed to this report.

# data[].attributes.attachment_link.title
Starbucks closes thousands of stores for anti-bias training

# data[].attributes.attachment_link.description
Turning away customers looking for an afternoon jolt of caffeine, thousands of Starbucks shops across the U.S. closed early on Tuesday to hold training for employees on recognizing hidden prejudices. It was part of the coffee chain's effort to deal with the outcry over the arrest of two...

# data[].attributes.headline
McDonald's Newest Menu Items Should Terrify Starbucks 

# data[].attributes.subject
McDonald's Newest Menu Items Should Terrify Starbucks 

# data[].attributes.body
McDonald's added new sets of espresso-based drinks to their menu that sounds like something you'd order at Starbucks.Yet, Starbucks coffee is cost nearly twice compared to McDonald's. McCafe first launched in the US in 2009, by 2017 it generated about $4 billion annually.

# data[].attributes.attachment_link.readable_text
McDonald's newest beverages sound like something you'd order at Starbucks.

On Wednesday, McDonald's announced that it had added a new set of espresso-based drinks to the menu: the caramel macchiato, vanilla cappuccino, and americano. The drinks, along with all McCafé specialty beverages, will be available for $2 for a limited time.

For comparison, a tall caramel macchiato at Starbucks costs nearly twice as much, at $3.95. A tall Starbucks cappuccino costs $2.95, and a caffé americano costs $2.25.

McDonald's launched the coffee brand McCafé in the US in 2009. McCafé now generates about $4 billion annually in the US.

McDonald's also announced a McCafé brand revamp, debuting a new logo and cups that feature a cleaner, more minimalist design, and colors that will change based on the season.

The more sophisticated new beverages and updated branding are part of the fast-food giant's plan to grow its coffee business and compete with chains such as Starbucks.

Advertisement

Earlier in 2016, McDonald's launched a successful campaign to highlight McCafé's low prices. A deal that priced coffee and soft drinks at $1 and other McCafé beverage at $2 helped grow US same-store sales 1.7% in the first quarter and 3.9% in the second quarter.

Executives have said that coffee is a crucial part of the company's plan to convert casual diners to loyal customers. To do so, McDonald's is "elevating and leveraging the McCafé coffee brand," according to the company's 2016 annual report.

McDonald's also announced Wednesday that it is launching a new bottled McCafé Frappé line in grocery stores. The ready-to-drink Frappé will come in three flavors: caramel, vanilla, and mocha.

# data[].attributes.attachment_link.title
McDonald's newest menu items should terrify Starbucks

# data[].attributes.attachment_link.description
McDonald's newest beverages sound like something you'd order at Starbucks. On Wednesday, McDonald's announced that it had added a new set of espresso-based drinks to the menu: the caramel macchiato, vanilla cappuccino, and americano. The drinks, along with all McCafé specialty beverages, will be available for $2 for a limited time.

# data[].attributes.headline
McDonald's Is Buying $12,000 Espresso Markers for All of Its U.S. Restaurants 

# data[].attributes.subject
McDonald's Is Buying $12,000 Espresso Markers for All of Its U.S. Restaurants 

# data[].attributes.body
In 2017, McDonald's is reintroducing their coffee, McCafe with many improvements. McDonald's isn't only giving Starbucks a run for its money but also Dunkin' Donuts. The burger sales have only increased by 3%, their coffee sales has increased by 10%.

# data[].attributes.attachment_link.title
McDonald's Is Buying $12,000 Espresso Makers for All of Its U.S. Restaurants

# data[].attributes.attachment_link.description
McDonald's is rolling out an upgraded McCafe, with coffee beans from sustainable sources, to try to compete with chains like Starbucks

# data[].attributes.body
Many companies are allowing their customers to order their food or drinks through the convince of their smartphones. In 2017, mobile ordering increased by 50% in the US. While this is convent for customers, Starbucks has faced problems with overcrowding which in return causes a bottleneck effect. Both McDonald's and Starbucks mobile ordering allows customers to get deals/point and customization. The main difference is McDonald's doesn't let customers finish their order until they are physically at the store and they have the choice on how they want to pick up their order (e.g. in-store, drive-thru, or curbside). Starbucks ran into problems with high traffic, they told customers order would be ready in two - five minutes, when in fact it would take ten, since then Starbucks has addressed this problem. McDonald's has speedy service and customers get their order in under five minutes. McDonald's doesn't promise their customers a relaxed and enjoyable experience like Starbucks does. While Starbucks wins the mobile order war, McDonald's isn't far behind.

# data[].attributes.attachment_link.readable_text
Hollis Johnson/Business Insider

As foot traffic falls flat, chains are turning to mobile ordering in an attempt to boost sales.

The number of orders being placed via mobile apps skyrocketed by 50% in US restaurants in 2017, according to data from the NPD Group. And, Business Insider Intelligence predicts that by 2020, mobile order-ahead will account for 10.7% of all quick-service restaurant (QSR) sales.

So far, Starbucks has led the way in mobile order and pay. Mobile and other digital payments make up nearly a third of all of the coffee chain's sales, and they account for even more of the company's sales growth.

"Almost all of our same-store sales growth is from those customers that we have digital relationships with and those that are in our Starbucks Rewards program," Starbucks CFO Scott Maw said at a JPMorgan forum in March.

Seeing Starbucks' success, other chains are trying to cash in on mobile ordering. In 2017, McDonald's announced plans to roll out mobile ordering at all US locations.

However, while mobile orders are intended to make ordering more convenient for customers, they can also create new issues. Starbucks has faced problems with overcrowding and bottlenecks in the past, though these seem to have been resolved with some behind-the-scenes changes.

With McDonald's building out its more gourmet coffee offerings and Starbucks working to improve its food selection, the two biggest chains in the US by sales are competing more and more. So, we decided to see how their mobile-ordering apps measure up.

Here's how the Starbucks and McDonald's mobile ordering experiences compare:

# data[].attributes.attachment_link.title
We tried McDonald's and Starbucks' newest weapon to win over customers - and the winner is clear

# data[].attributes.attachment_link.description
As foot traffic falls flat, chains are turning to mobile ordering in an attempt to boost sales. The number of orders being placed via mobile apps skyrocketed by 50% in US restaurants in 2017, according to data from the NPD Group.

# data[].attributes.headline
McDonald's is Stealing Starbucks Customers

# data[].attributes.subject
McDonald's is Stealing Starbucks Customers

# data[].attributes.body
McDonald's has better coffee than Starbucks, it is cheaper ($2 for a small cup) and provides faster service. Not only is McDonald's winning over customers in the morning but also in the afternoon, coffee aside but also providing more food options.

# data[].attributes.attachment_link.readable_text
McDonald's could be cutting into Starbucks' sales, according to a note from Bernstein analysts.

The fast-food chain seems to be winning over customers in the afternoon with "more food options and cheap coffee."

Starbucks has struggled to grow afternoon sales, killing its well-known Frappuccino Happy Hour deal that aimed to drive traffic after 3 p.m.

It's looking a lot like McDonald's is stealing Starbucks customers.

In a note to investors, Bernstein analysts said that McDonald's may be taking share away from Starbucks.

However, the fast-food chain isn't necessarily stealing the customers looking for a cheap cup of coffee in the morning. Instead, McDonald's is winning over afternoon customers.

"There is some evidence that MCD - with more food options and cheap coffee - is taking pm traffic from SBUX (and DNKN)," analyst Sara H. Senatore writes.

Advertisement

Negative afternoon traffic is Starbucks' biggest problem, Senatore says. Competition is more intense in the afternoon, and customers are less loyal and more cost-conscious.

McDonald's has recently been ramping up efforts to win over coffee drinkers who may otherwise visit Starbucks.

Over the last year, the chain has launched new espresso-based drinks at significantly cheaper prices than Starbucks' counterparts. Currently, the fast-food giant has a deal that allows customers to purchase any small McCafé drink for $2.

Starbucks has long set its sights on growing afternoon traffic. In years past, the Frappuccino Happy Hour has been a major sales driver after 3 p.m. in summer months. However, Starbucks canceled the deal this year, with executives saying it had not been profitable for the two prior years.

Instead, Starbucks brought back a new version of Happy Hour across the US in March. The new Happy Hour features a shifting range of deals, with customers being alerted via apps and email of the promotions of the day.

# data[].attributes.attachment_link.title
McDonald's 'cheap coffee' could be stealing customers from Starbucks when it needs them most

# data[].attributes.attachment_link.description
McDonald's may be taking share away from Starbucks, Bernstein analysts wrote in a note to investors. However, the fast-food chain isn't necessarily stealing the customers looking for a cheap cup of coffee in the morning. Instead, McDonald's is taking afternoon customers.

# data[].attributes.body
Both companies source their coffee ethically and partner with organizations that focus on regulating agricultural and environmental farming standards (McDonald's + Rainforest Alliance and Starbucks + Conservation International). Both companies are involved with the "Sustainable Coffee Challenge" which strives to make coffee the first sustainable agricultural product -- the challenge was started by Starbucks and Conservation International in 2015 and now has more than 90 international partners.

# data[].attributes.attachment_link.description
From producers to retailers, partners from across the coffee sector are stepping up to join the Sustainable Coffee Challenge.

# data[].attributes.body
Starbucks offers a more integrated mobile application that generates automatic loyalty rewards for its users. The application allows users to place orders in advance prior to arriving to a Starbucks location, pay for mobile and in-person orders, receive updates on order status and provides weekly purchase challenges, which encourages user engagement by offering additional reward incentives.

McDonald's offers a mobile application that allows users to place orders prior to arriving; however, it is does not compare to the ease of the Starbucks system. McDonald's does not offer a loyalty rewards program ingrained into their mobile app, but it does offer McCafe Rewards -- collect 7 McCafe Reward cards from each cup and get a free hot beverage.

# data[].attributes.attachment_link.readable_text
"No single competency is enabling us to elevate the Starbucks brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay."- Howard Schultz, 2013

I think Howard says it all:

Mobile Payments Convenience

Automatic Loyalty Rewards

Over Four Million Mobile Wallet Payments Per Week
While most of the world was getting ready for Halloween celebrations in late October 2013, Starbuck announced that now 11% of sales volume comes through its own mobile wallet [1]. This is just a staggering amount of transactions for a single retailer, about four million mobile payments per week, and eight million consumers are using mobile apps to pay. Howard had some of the most strongest words I have heard supporting mobile payments by a retailer.
The Courage To Innovate With Simple Technology
On a nice spring day early in 2009, Starbucks launched its mobile card app in 16 stores. It was so successful it rapidly expanded the program nationwide by allowing consumers to pay by letting patrons display a barcode to be scanned at the point of sale. This was the genius work of Benjamin Vigier and his team. Benjamin now heads up retail payments for Apple and we will likely see the results of his 3+ years of work at Apple very soon.

Benjamin took the very simple 2D barcode and inverted the use case that most companies were using. By allowing the register to scan the 2D barcode rather then the user scan a 2D barcode. This was a maverick move at the time as most technologists were laughing at the 2D barcode and the way it was used.

Benjamin built this systems years before there was a Square wallet, Clinkle, PayPal Wallet or just about any other system. It is successful for so many reasons that would take a book to cover.

It took great courage for Starbucks to take a trail blazing roll to innovate. The company did not, and still does not primarily use the services of an outside company and there is a huge lesson to be learned here. Read on for some clues.
Brilliantly Simple
Benjamin shifted the technology stack on the side of the POS system and a 2D barcode reader. This allowed for the technology of the Starbucks wallet to only need to faithfully display a custom 2D barcode. It was brilliantly simple and elegant. At the time, many startups wanted to reinvent the wheel and require all aspects of the technology a business is using to change. Benjamin made the new program fit existing POS found at every Starbucks.
One Loyalty Size Fits All?
Starbucks had one of the most successful retail loyalty programs in the US. This did not take place overnight. The company worked diligently for decades to perfect this program. There were countless empirical tests and studies that crafted the program. Although it looks very simple the exact same system could not work at a vast majority of retailers. And this is the problem with most generic "punch card" loyalty systems and even advanced points based loyalty systems. They are sold as a one size fits all program, and they do not.
Said To Me By A Payment Startup Founder: "I have a punch card for a coffee place in my sock drawer at home"
It has always been fascinating to me to observe some of the most brilliant payment startups construct a "loyalty program" based on just a guess of what retailers are looking for. I have worked with hundreds of startups over the last 8 years and 99% of the time the people building loyalty programs have either not used any program before or have an old punch card in the sock drawer at home. The point they thought they were making was how inefficient loyalty cards are. This is the start of the flawed thinking of why these programs fail. It is just very hard to get used to seeing fellow technologists build things based on completely flawed reasoning.

The builders of the Starbucks wallet used loyalty cards, perhaps for decades, but they also empirically studied these systems in live retail environments. This aspect is overlooked by some of the most informed experts.
This Secret Has To Be Told
Starbucks also was a very early user of gift cards. The original reason Starbucks deployed these cards was to allow consumers to purchase the gift cards as, well gifts to friends. It turned out that empirical research showed that within the first year 75% of the cards were being used by the original purchaser. This very large by still rather secret fact informed the logical development of a mobile wallet. This was not a technological dream but a progression from empirical, Practical and Pragmatic research. I credit this to one of the foundational reasons for the spectacular success.

# data[].attributes.attachment_link.title
Why Is The Starbucks Mobile Payments App So Successful?

# data[].attributes.attachment_link.description
"No single competency is enabling us to elevate the Starbucks brand more than our global leadership in mobile, digital, and loyalty. Starbucks is a clear leader in mobile payments and we are encouraged by how consumers have embraced mobile apps as a way to pay.

# data[].attributes.body
More McDonalds locations offer drive-thrus than Starbucks locations.

# data[].attributes.body
Is there a difference for customers to see their breakfast or lunch displayed before heated to order at Starbucks? Starbucks offers healthy alternatives such as turkey bacon and egg whites, but McDonalds now does as well. Food on display is only available while items last. Busy locations typically run out of breakfast by mid afternoon.

McDonalds customers can order breakfast all day long, lunch or dinner off a menu in a more traditional way, and are guaranteed hot meals.

# data[].attributes.body
McDonald's offers nearly identical drinks to Starbucks at almost half price.

Starbucks Frappuccino (12 oz): $3.95
McCafe Frappe (12 oz): $2.29

# data[].attributes.headline
McDonald's Coffee is giving Starbucks a run for its money.

# data[].attributes.subject
McDonald's Coffee is giving Starbucks a run for its money.