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McDonald's vs. Starbucks: Coffee Battle Brewing

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Would you like a nonfat latte with that Big Mac?

That’s what you’ll probably be hearing in the near future, if you’re a fan of the Golden Arches. McDonald’s announced recently plans to add “coffee bars” to its 14,000 U.S. locations starting this year. They’ll also be hiring baristas to work the new stations serving up mochas, lattes and the Frappe – kind of a like a Starbucks Frappuccino or a Coffee Bean Ice Blended.

From yesterday’s Wall Street Journal:

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Internal documents from 2007 say the program, which will also add smoothies and bottled beverages, will add $1 billion to McDonald’s annual sales of $21.6 billion. The confrontation between Starbucks Corp. and McDonald’s Corp. once seemed improbable. Hailing from very different corners of the restaurant world, the two chains have gradually encroached on each other’s turf. McDonald’s upgraded its drip coffee and interiors, while Starbucks added drive-through windows and breakfast sandwiches...

McDonald’s is entering its sixth year of a successful turnaround while Starbucks has begun struggling after years of strong earnings and stock growth.

Now we doubt that McDonald’s will really be able to draw more people into its locations to come and hang out over coffee. We don’t think we’ll ever hear: “Hey Sally, let’s catch up and talk over coffee…my McDonald’s or yours?” What we do think is that McDonald’s will be offering their regular customers added calories to their not-so-happy meals. If a Frappe is anything like a grande White Chocolate Mocha Frappuccino with whip, that’s an extra 410 calories added to a “meal” of a Big Mac (540 calories, 29 grams of fat) and medium fries (380 calories and 20 grams of fat).