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Brewing up business

If you haven’t tried McDonald’s coffee in recent years, John Betts is hoping you’ll give it another shot.

If you haven’t tried McDonald’s coffee in recent years, John Betts is hoping you’ll give it another shot.

In a bold move that promises to heat up the morning coffee wars, McDonald’s is offering customers a free morning coffee every day for the next two weeks — a savings of about $1.22, including tax, on a 10-ounce cup.

That might not sound like much.

But with Canadians drinking 36 million fewer cups of coffee in the last 12 months, the battle for a larger share of a declining coffee market is heating up.

“Our coffee sales are up so far this year,” said Betts, president of McDonald’s Restaurants of Canada. “We sold four million more cups of coffee in the first quarter.”

That represents a double-digit increase over the previous year, a spokesperson said later, a considerable gain at someone’s expense as the overall market declined.

Sipping on a premium roast Arabica coffee — a notch above the watery brew McDonald’s used to sell before switching to Mother Parkers as its supplier — Betts says he’s hoping the freebie will prompt even more consumers to give the brew a try.

The promotion is clearly aimed at turning up the heat on market share leader Tim Hortons Inc., Perry Caicco, a financial analyst with CIBC World Markets, wrote in a note to clients.

Given that 60 per cent of Tim Hortons’ sales occur in the morning, and more than 50 per cent of those are coffee, the rival giveaway could hurt its performance this quarter, Caicco cautioned investors.

 
 
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