McDonald’s takes battle to ailing Starbucks

Posted by Daniel Palmer on 15th December 2008

McDonald’s, the world’s largest fast food company, has taken a none-too-subtle swipe at Starbucks in their latest US ad campaign.

Coffee cups on table - Starbucks

Starbucks, which had been a phenomenon with sensational growth rates for over a decade, has been symbolic of the downturn with a fall from their lofty heights. In Australia, they cut over two-thirds of their stores in August after announcing the closure of 600 underperforming outlets in the US in July. They still maintain their position as the largest coffee chain in the world with around 15,000 stores but are finding competition in their most lucrative market, the US, becoming tougher.

McDonald’s, which has been looking to diversify their offering in recent years with the ‘healthy choice’ menu and a greater focus on improving their coffee-related beverages, has placed billboard ads in the original hometown of Starbucks, Seattle, promoting their McCafe outlets. Over 100 have been put up with comments such as “four bucks is dumb” and “large is the new grande” – a clear dig at Starbucks.

McDonald’s called it “a light-hearted, fun approach to our brand,” in a statement released last week, but it hasn’t been well received at Starbucks.

“Comparative campaigns are all well and good but only when they’re credible and authentic. If the claim is not supportable or the tone is off, you risk losing credibility,” Deb Trevino, Director of Global Communications for Starbucks, told CNN. “We will not enter into a tit-for-tat. Our customers are interested in more than just the coffee, they come for the experience.”