December 11, 2023 • 5 min read |
But first, I'm lovin' it. |
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Angela Weiss/AFP via Getty Images |
The most recognizable name in fast food is switching things up. McDonald's is rolling out a new restaurant concept focused on cold, customizable beverages that's looking to compete with Starbucks. CosMc's — a homage to an obscure McDonaldland character from the late 80s — opened its inaugural location in a Chicago suburb, Business Insider's Nancy Luna reports. The Bolingbrook, Illinois, restaurant is the first of 10 scheduled to open by the end of 2024, with the rest coming to Texas. The strategy for CosMc's, which is considered a pilot program, is to address the so-called "3 pm slump" fast-food chains face between lunch and dinner. It's a time slot that's been a sweet spot for beverage-focused chains like Starbucks, Nancy reports, thanks partly to their customizable, cold drinks. Cold foam and oat milk are big business, as drink modifiers add up to roughly $1 billion in revenue for Starbucks. And that's not the only change to the McDonald's "universe" — their term, not mine. The Golden Arches is supersizing its burgers and bringing back its once-beloved chicken wraps after competitors pushed into the snack-wrap space earlier this year. |
Richard Bernstein Advisors |
McDonald's changes come amid an interesting time for fast-food chains. Inflation has hit the industry hard, making the once-affordable food option a lot more pricey. McDonald's dollar menu isn't even a thing anymore. Things have gotten so bad you're better off cooking at home again. And then there's the "Ozempic effect." The buzzy weight-loss drug has some worried that customers' appetite for fast food might dry up — even if those fears are unfounded. Which is why launching a beverage-focused chain is such an interesting play. Call it "beverage math," but when it comes to drinks, I don't tend to scrutinize their price the same way I would a full meal. And fast-food beverages are typically a high-margin item for chains, Nancy told me. CosMc's could also be a bid for McDonald's to boost its app and loyalty program. McDonald's app has grown over the years, with over 57 million active members, but it still leaves much to be desired. (Nancy reviewed all the top chain apps.) Starbucks, meanwhile, is the industry's gold standard. The app accounts for over a quarter of the US company store transactions. And it's not just driving business. Starbucks' app essentially functions as the world's largest unregulated bank. It has billions of dollars deposited on gift cards that amount to an interest-free loan for the company. (Jamie Dimon could never.) To be sure, 10 CosMc's is not even a drop in the bucket of McDonald's 40,000-plus restaurant empire. But it's not hard to see how CosMc's could quickly become a key part of the ubiquitous chain. |
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Your Monday headline catchup |
A quick recap of the top news from over the weekend: |
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Markets 🔔 Before the opening bell: US stock futures trade mixed early Monday, after jumping Friday as a Goldilocks jobs report took pressure off of interest rates. |
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1. Here's the NDA Jeff Bezos made his former housekeeper sign before she started working for him. The billionaire's former employee was prohibited from sharing her "personal observations, ideas, experiences, images or impressions that refer or pertain in any way to Mr. Bezos or any of his family members, no matter in what form they may be." Read the whole NDA here. 2. OpenAI's Ilya Sutskever doesn't seem to be having fun at work these days. The startup's cofounder and chief scientist played a key role in CEO Sam Altman's ouster. Now his position has yet to be addressed, and he hasn't been seen at OpenAI's San Francisco office. More on the uncertain future of Sutskever. 3. Elon Musk's big bet isn't paying off. After an incredible run that saw him named Time's 2021 Person of the Year, Musk is facing some serious turmoil. From figuring out the future of debt-laden X to Tesla's shrinking profits, things are not going well for the richest person in the world. |
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carles miro/Getty, We Are/Getty, jacoblund/Getty, Tyler Le/Insider |
1. An exclusive look at Adam Neumann's pitch to revolutionize how we live. Business Insider's Ben Bergman was the first reporter to tour Flow's inaugural apartment building. Check out his recounting of what life is like at the Fort Lauderdale residences. 2. Gen Z is anxious, and it's remote work's fault. The workforce's youngest generation is particularly stressed. And the fact many have never set foot in an office since they started working isn't helping matters. 3. If you're worried about layoffs, here's what you should look out for. An employment law attorney detailed the early signs that job cuts are coming. Keep an eye out for clues from your supervisor and HR and be on the lookout for cutbacks. |
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- Donald Trump takes the stand. The former US president is expected to testify today for the defense in the civil fraud trial against the Trump Organization.
- Golden Globe nominations are in. Nominees for the 81st edition of the television and movie awards will be revealed ahead of the winners' presentation on January 7.
- Hollywood's list of the best that never was. The Black List, a collection of the best unproduced screenplays as voted on by studio executives, is released today. Alums of the list include "Argo," "Slumdog Millionaire," and "Whiplash."
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