(Washington Post) – The fast food breakfast wars are alive and well, and McDonald’s is on the attack.
The maker of the Egg McMuffin announced that it will be serving free coffee on Mondays for the rest of the year in the Greater Washington region, which includes the District of Columbia, as well as several Maryland, Virginia, and West Virginia counties. As part of the offer, which begins today, patrons will be able to walk up to the counter, and then walk away with a small iced or hot coffee, completely free of charge. For those in a rush, the perk will also be available at drive-through windows.
Those who choose to begin their weeks with a free cup of joe at participating McDonald’s branches won’t have to open their wallets for anything else, but the fast food breakfast behemoth certainly hopes they will, at the very least, be tempted to.
Luring customers into its doors has scarcely been a more difficult task for McDonald’s in the United States, which is still the chain’s largest market. The announcement comes on the heels of what has been a particularly difficult stretch for the company. Sales at stores that have been open for at least 13 months have fallen or remained flat in 13 consecutive months.
Coffee is one way to start turning things around. “We know that coffee drives the visits at our breakfast time,” said chief executive Donald Thompson in an earnings call last year.
Part of the problem is that many of McDonald’s offerings have simply gotten too expensive. Big Macs, which now cost nearly $5, compete with offerings from higher end chains, like Chipotle. And McDonald’s customers appear to be migrating. Even when McDonald’s has pandered to those who might prefer cheaper options, it hasn’t exactly worked out. McDonald’s “Dollar Menu & More” promotion, which includes items that cost between $1 and $2, has done little to boost sales.
Now, it seems, McDonald’s is wary of losing ground during what might be its most important meal of the day.
Breakfast, which McDonald’s serves until 10:30 a.m. nationally, has proven to be an especially successful part of the day for the company. Roughly a quarter of McDonald’s sales are earned during the morning window. But breakfast is also becoming an increasingly crowded space among fast food eateries. Already a more than $50 billion business, breakfast sales account for nearly all revenue growth in the U.S. fast food industry (they were responsible for more than 90 percent between 2007 and 2012).
Last year, Taco Bell became the latest chain to add breakfast to its menu, rather blatantly pitting itself against McDonald’s in advertisements. McDonald’s belittled the move on social media, snarkily quipping that “imitation is the sincerest form of flattery.” But Taco Bell’s foray into the breakfast business has since proven rather successful. Same-store sales rose by 3 percent in the third quarter of last year, thanks in large part to its new egg wraps and breakfast tacos.
Free coffee is hardly a new concept for McDonald’s, which did not immediately respond to a request for comment. Over the past year, McDonald’s has increasingly bet on coffee promotions as the ideal way to convince Americans to eat Egg McMuffins instead of whatever its competition is offering. For the first time ever, the company offered free coffee nationally for two weeks last spring. The fast food giant followed up the promotion by dangling free coffee on Mondays in Michigan between October and December.
This offer in the Washington region, though, is going to last much longer: for all of 2015. Who knows? Maybe free coffee will go from being a regional experiment to a national policy.
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Original article published by Roberto A. Ferdman.