Starbucks Takes on McDonald's in Chicago

Launching line of breakfast sandwiches next week

Published in CSP Daily News

CHICAGO -- On May 31, Starbucks Coffee Co. will start offering warm breakfast sandwiches in Chicago, the home base of McDonald's Corp., its targeted rival for the offering, reported Crain's Chicago Business.

Starbucks offered Crain's a preview sampling of the five new sandwiches, it said. The most similar offering to the McDonald Corp.'s mainstay Egg McMuffin is the sausage, egg and cheddar sandwich served on a toasted English muffin, using natural, aged cheese, unlike the processed American cheese of the Egg McMuffin.

The fare [image-nocss] gets fancier from there, Crain's said, with a peppered bacon, egg and cheddar sandwich, a turkey bacon sandwich made with cholesterol-free eggs and reduced-fat white cheddar cheese, the Black Forest ham, egg and cheddar sandwich and the Eggs Florentine with baby spinach and havarti cheese.

For McDonald's Corp., which derives about a quarter of its sales at breakfast, the encroachment of Starbucks poses a real threat, said the report. When you look at McDonald's core competitive strengths, breakfast is high on the list. They really invented that daypart, Bob Goldin, an executive vice president at Chicago-based restaurant consulting firm Technomic Inc., told the magazine.

McDonald's already has been fighting back with the introduction of premium coffee earlier this year. The Oak Brook, Ill.-based chain is also testing breakfast burritos in some markets, and Goldin said he expects McDonald's to promote its breakfast menu more aggressively.

The new Starbucks breakfast sandwiches will be available next week in 126 Chicago-area Starbucks, the report said. More Starbucks in the area will be outfitted with ovens and will have the sandwiches by the end of February. Chicago is the fifth city to get the warm sandwiches. Seattle, where Starbucks is based, Portland, Ore., Washington, D.C., and San Francisco already have them. Our customers are telling us they really enhance the Starbucks experience, Brigid Benson, a Starbucks regional food manager, told Crain's.

Priced at $2.95, the Starbucks sandwiches cost 32% more than the $2.02 Egg McMuffin. And they will be available at all hours, unlike McDonald's breakfast service, which usually ends around 10:30 a.m. Also on May 31, Starbucks will start offering two warm lunch sandwichestomato mozzarella with basil and spinach and a southwestern turkey sandwich with pepper jack cheese. Once the Starbucks ovens are up and running next week, Starbucks also will encourage customers to warm up their pastries, said the report.