McCafé is approaching the landmark figure of 1500 shop-in-shop units on the European market. It has taken less than five years to open all these units.

McCafé is approaching the landmark figure of 1200 shop-in-shop units on the European market.

Jenny Wiggins in London for Financial Times writes that McDonald’s is aiming to overtake Starbucks as Europe’s biggest coffee chain, with plans to open several hundred McCafé stores selling pastries and cappuccinos this year.

While Starbucks – which has 1,300 stores in Europe – has been scaling back on its European expansion, McDonald’s has ambitious growth plans for its branded cafes on the continent.
The fast food chain wants to expand its chain of McCafés, which operate within or next to regular McDonald’s restaurants, to 1,200 in Europe by the end of the year.

McDonald’s has yet to open any McCafés in the UK, where about half of Starbucks’ European stores are based.

“We can become the biggest seller of coffee in Europe,” Jerome Tafani, chief financial officer for McDonald’s Europe, said.

He added that McCafés were attracting new customers by creating a “cosy” atmosphere at the group’s restaurants and targeting people looking for breakfast on their way to work.

The chains emerged in Australia in the early 1990s and were introduced to Europe in Ireland in 2002. Nearly half of Germany’s 1,200 McDonald’s restaurants today have McCafés, while some 20 per cent of restaurants in Russia and Italy have them. The chain is opening them in France and Austria.

McDonald’s has installed coffee machines from high-end manufacturers in its McCafés in an effort to win over sceptics. It is selling different blends of coffee supplied by Kraft in each market to suit local tastes.

Cappuccinos are priced at €2 to €2.50 ($2.80 to $3.50) per cup.

The growth of the McCafé chain adds to a resurgence of fortunes at McDonald’s, which has seen sales for its core hamburgers and fries rise on the back of renewed demand from cash-poor consumers in the recession.

McDonald’s has launched an advertising campaign in the US promoting its cappuccinos and lattes in its restaurants and drive-throughs.

The group claimed its strategy of opening McCafés in existing restaurants in Europe – at a cost of €60,000 to €85,000 per café – allowed it to recoup its investment more quickly than Starbucks, helping it break into difficult markets such as Italy.

“Our business case is not the same as Starbucks,” Mr Tafani said.

Financial Times