McDonald’s is vying to become a beverage destination for customers with discount fountain deals this summer, the Wall Street Journal reported.
In summers past the QSR chain has offered large sweet tea for only $1, with most of its markets participating in the promotion. This summer, McDonald’s wants to go a step further, selling more markets on the idea of offering all fountain drinks for $1 for 150 days, up from 100 days the previous year.
McDonald’s spokeswoman Danya Proud told the Wall Street Journal more than 90% of U.S. restaurants sold drinks for $1 last summer, which “should give you an indication of its success for our business.”
Fountain drinks normally run at about $1.39 for a large soda. Some franchisees worry that discounting drinks, sales of which typically compensate for discounts on other products, the bottom line will suffer, especially if customers buy from its Dollar Menu.
McDonald’s hopes the promotion will pull customers from other fast-food chains and convenience stores and introduce them to its new beverage lineup, including smoothies and frappes-blended, icy coffee drinks-both set to debut nationally around midyear.
McCafé espresso-based drinks have helped make coffee 5% of total sales, double what they were in 2006, while the company is on track to top a goal of adding $125,000 a year in per-store sales by adding new beverages, the Wall Street Journal reported.
Drink discounts did cut into McCafé sales some last year, however as consumers picked discounted beverages over pricier espresso drinks. The impact, however, “certainly wasn’t significant enough to prevent us from recommending it again,” Proud said.
Other companies are responding before McDonald’s promotion hits on Memorial Day.
Starbucks Corp. plans to offer to customize the cold drinks starting in May, while Burger King Holdings Inc. and Taco Bell are adding more beverages this summer.
McDonald’s also is testing other beverage additions, including frozen lemonade and shakes topped with whipped cream and a cherry that come in see-through containers, both in a small number of stores.