Today, Starbucks reported that it missed earnings and will be cutting jobs, closing stores.
Two days ago, McDonald's said it will be opening 1,000 new stores.
In the past couple of years, Starbucks has lost billions of dollars in value, with McDonald's gaining. Is one's loss the other's gain? While it would appear so, I suspect not.
I have to confess, I like both restaurants. McDonald's is not as good as Burger King, Arby's or others, but it feeds you on the cheap. However, if I want a cup of coffee, I'll go to Starbucks and get some Pike. Other places make their coffee much to weak for me. I'm also a big fan of the Doubleshot, iced or in a can, or even +energy.
The problem is that Starbucks exploded. They went from being a small chain of Seattle shops to opening thousands of stores per year. There are so many Starbucks near me that two of them are within a 5 minute walk.
Starbucks thought it could emulate its cool, hip, yuppie, liberal formula (which fits me perfect) in the middle of America. I'm telling you, Starbucks in Oklahoma cannot be very popular.
Here's what I see as the endgame. Right now Starbucks is introducing breakfast foods. McDonald's is introducing coffee. While they will each be relatively popular, imagine if a Starbucks could sell an Egg McMuffin, or a McDonalds sold cups of Pike and Doubleshots.
Within 3 years, Starbucks will be a subsidiary of McDonalds. They will still have some standalone stores (that sell McDonald's breakfast products), but by and large, they cannot stay independent.
There's always Caribou.
1 comment:
McDonalds and Starbucks would be a great merger. Starbucks is a ripoff and Monopoly and they're getting what's coming to them.
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