McDonald's Enters Gourmet Coffee Field

By
Kathleen O’Neill
January 6, 2006, 1:29 AM ET
2 min read

C H I C A G O, May 2, 2001 -- It’s Ronald McDonald meets Mr. Coffee.

McDonald’s Corp. opened its first U.S.-based McCafe in Chicago today, some eight years after introducing the high-end coffeehouses to Australia.

Now that the burger giant has 300 cafes throughout the world, it’s looking to duplicate the success stateside. If the Chicago flagship location takes off, McDonald’s also hopes the new bistro will win over some of the Starbucks double-skim-no-foam-latté crowd.

The fare is a far cry from Shamrock Shakes and McRibs. McCafe’s menu boasts decadent desserts like Chocolate Raspberry Rumble cake and Caramel Cream Steamer coffee. A latté runs about $2.50 and a muffin will set you back about $1.50. There are bottles of Evian, herbal tea and smoothies for the health-conscious.

Items are available for takeout, while dine-in customers are treated to fine china and stainless steel flatware instead of Styrofoam containers and sporks. McCafe aims to recreate a Paris cafe with its leather couches, lace curtains, vases of red roses and vintage French posters.

Beefing Up Sales

McCafe is the fast food giant’s latest attempt to boost sagging sales. Domestic sales have slumped due to saturation in the fast food market and sales abroad have been hurt by fear of mad cow disease.

Recently, McDonald’s has expanded its menu and acquired such big names as the bankrupt Boston Market. The company is shuffling eight top management positions, which analysts agree is long overdue.

If successful, McCafe could help boost McDonald's sluggish numbers and perhaps update its image. If the cafe fails to catch on, it could hurt the already ailing burger conglomerate, evoking vague memories of something called the Arch Deluxe.

Daniel Hurtado, a Chiacgo accountant who took a little time out from number-crunching for some coffee and people-watching at the new McCafe, thought the coffeehouse would take off only if its prices stay below Starbucks’. “It would be awkward to pay more money for your coffee than your Value Meal,” he said.

Time will tell whether McDonald’s customers want to kick back with the New York Times Book Review and tiramisu or are simply content to hear “Would you like fries with that?”