A day after it was announced Taco Bell would be utilizing Ronald McDonald’s in their breakfast advertising campaigns, McDonald’s is fighting back by offering free coffee.
The burger fast-food joint surprised the industry on Friday – and groggy customer son their way to work when they announced that its participating U.S. locations will offer free small cups of McCafe coffee during regular breakfast hours from March 31 through April 13.
McDonald’s rarely offers freebies, so the move shocked many.
It is likely McDonald’s is fighting back after a new Taco Bell breakfast commercial debuted this week, featuring several dozen real life people named ‘Ronald McDonald’, who ranted and raved about the new Taco bell breakfast line-up.
Breakfast items are widely regarded as the last, best-growth segment in the fast food industry. It is a $50 billion business, Technomic estimates. McDonald’s has long been a force to reckon with in the breakfast segment for decades taking more than one-quarter of the fast-food breakfast business, but it is now feel pressure after an unlikely breakfast competitor made its way into the game.
“This event is McDonald’s way of encouraging new guests to try McCafe coffee,” says Greg Watson, senior vice president of McDonald’s U.S. menu innovation. McDonald’s is also hoping to convince consumers it has already retained into coming in for breakfast more often. Their plan is, of course, that people who stop in for coffee will also walk out with other food items.
For McDonald’s, breakfast is just the start of the problem. CEO Don Thompson said the chain’s new product arsenal needs to improve. In February sales at its stores open at least 13 month slumped 0.3%, as its U.S. business fell for the fourth consecutive month after a fit of chilly winter weather.
Even with Taco Bell joining the breakfast competition, McDonald’s is expected to stay atop the competition. “So far, no one has been able to compete with McDonald’s at breakfast,” says Ron Paul, president of Technomic. “Everyone is grabbing for a little bit of market share wherever they can get it.”