McDonald's said it is opening a new chain called CosMc's that will focus on coffee and other drinks, a step that is viewed as a challenge to Starbucks and Dunkin' as the fast-food giant seeks to boost afternoon sales.
The company opened its first CosMc location in Illinois on Thursday, with plans to open additional restaurants in 2024.
The rationale for the restaurant stems from the growing demand for an "afternoon beverage pick-me-up occasion," a $100 billion market where McDonald's currently isn't a strong presence, said McDonald's CEO Chris Kempczinski, speaking at an investor presentation on Wednesday. The new chain will allow the company to create customized beverages that are difficult for McDonald's restaurants to create, he added.
CosMc's concept is "what would happen if a McDonald's character from the 1980s that was part alien, part surfer, part robot" opened a restaurant in 2023, Kempczinski added.
What's on CosMc's menu?
The chain will include new customizable drinks and McDonald's favorites like the Egg McMuffin, the CEO noted.
Some of the coffee drinks that will be offered include a churro frappe, a s'mores cold brew, and a turmeric-spiced latte, according to the company. CosMc's will also sell non-coffee beverages, including a sour cherry energy burst, a blackberry mint green tea, and a popping pear slush.
The chain will also offer "sweet and savory treats," Kempczinski said. These include a spicy queso sandwich, a creamy avocado tomatillo sandwich, pretzel bites, and caramel fudge brownies.
What kind of drink customizations will it have?
McDonald's said CosMc's will offer customizations including popping boba, flavor syrups and energy and Vitamin C shots.
Where are CosMc's locations?
The first location is in Bolingbrook, Illinois, a suburb of Chicago, with about 10 additional locations set to open in Texas in 2024, Kempczinski told investors.
The first CosMc opened to the public on Thursday, located off Weber Road in Bolingbrook, according to CBS News Chicago. The opening drew throngs of customers, leading to long lines of cars waiting to place their orders at the drive-through. One customer told CBS Chicago he waited three hours to get a frappe.
It's not clear yet whether CosMc's will expand beyond the Illinois and Texas locations. The company said it will study the results for at least a year before determining whether to add more locations.
Is McDonald's adding more of its own restaurants?
Yes, McDonald's plans to open about 10,000 new stores worldwide by 2027 in what it anticipates will be the "fastest period of growth" in its 60-year history, the company said Wednesday.
"The big story is what [CosMc's] says about McDonald's and our potential," Kempczinski said on Wednesday. "To think a little over a year ago, this was just an idea. And this week, we're opening the first test site. We're innovating, testing, and learning with speed."
The expansion comes as same-store sales jumped 8.1% in the third quarter, pushing the chain to speed up the pace of its restaurant openings.