McDonalds'profit rises despite all gloom and doom and coffee might...

by chee Leng (on coffee makers)

Mac Cafe

Mac Cafe

The whole world is in a bad shape (or so the Newspaper tells us). But, if one would to look at McDonald's, it does not seems to be the case.

They did not suffer any recline in profit, in fact they perform better than what analyst forecasted! And we are talking about a food company, not any smashing technology company or social media titan!

So, how they managed to keep customers coming when its peers are struggling to breakeven. I think Coffee might be the answer.

In a previous article, I touches on how coffee was helping McDonald posted better profit, then in an even earlier article, I highlighted a survey about consumers' loyalty to McDonald's coffee.

Mcdonald sells more coffee than Starbucks

Coffee that is driving McDonald's sales

Mcdonald's has most loyal coffee drinkers

McDonald's gourmet coffee are anything but good and coffee snob would not even consider McDonald's coffee to be good but the consumers love them.

The pricing is just right. Gourmet coffee price tier is too high, in fact even Starbucks pricing is too high. MC Cafe pricing hits the sweet spot, the tier that is okay with the consumers.

And that is important.

Here is my $0.02.

1. The price point

Having a good price point means that instead of the shop around the corner that also do not give better coffee, they can go for MC Cafe that gives them more variety of foo to choose from

2. Reasons for visit

Coffee creates more reasons to visit McDonald's. You only have 1 lunch and dinner, but can many coffee during the day.

And this could be the sole reason that McDonald's' enjoy higher traffic flow. People now have one more reason to go there -coffee.

3. The power of suggestion

Sure, we all agree that MC Cafe is not really your gourmet premium coffee, but nobody is stopping them from branding themselves as such.

Thus, when bundle in with a promotion, another $0.50 for a cappuccino or espresso sounds so attractive. This makes some more money for McDonald.

So, I am pretty sure that coffee added much profit to this burger chain, it opens out plenty of opportunity for them to offer new products, new slots for consumers to make the purchases.

I probably say it many times, but coffee is recession proof.

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