- McDonald’s plans to open 10 locations of CosMc’s, a new spinoff brand, to test whether the concept could work across the U.S. and other markets.
- The burger chain is positioning CosMc’s as a fast, convenient way to grab a pick-me-up snack or coffee.
- The name for the new brand comes from CosMc, a McDonaldland mascot that appeared in advertisements in the late 1980s and early 1990s.
McDonald’s will open the first location of its new spinoff brand CosMc’s this week in Bolingbrook, Illinois.
The fast-food giant plans to open 10 CosMc’s locations, including nine restaurants in Texas, by the end of 2024 in a test. McDonald’s will then spend a year analyzing data to decide whether it will expand the small-format chain.
The name for the new brand comes from CosMc, a McDonaldland mascot that appeared in advertisements in the late 1980s and early 1990s. CosMc is an alien from outer space who craves McDonald’s food. The company has leaned more into marketing its mascots after seeing success with the Grimace Birthday Meal earlier this year.
The burger chain first revealed it was creating CosMc’s as a spinoff in July, but withheld more details about its plans. Photos of the Bolingbrook location surfaced on X, formerly known as Twitter, earlier this week.
With a menu that includes old favorites such as Egg McMuffins and M&M McFlurries, and new items such as Churro Frappes and pretzel bites, McDonald’s is positioning CosMc’s as a fast, convenient way to grab a pick-me-up snack or coffee.
“When 3 p.m. hits, and you need a boost, take a trip to CosMc’s,” a narrator said in a video shown to investors Wednesday.
McDonald’s specifically set out to create a brand that could sell customizable drinks and coffee popular in the afternoon segment.
“This is a $100 billion category growing faster than the rest of the [informal eating-out segment] and with superior margins,” McDonald’s CEO Chris Kempczinski told investors.
CosMc’s restaurants will have a smaller real-estate footprint than a typical McDonald’s location, but the new locations are testing a range of layouts, including multiple drive-thru lanes. Customers using credit cards will also be able to pay at the drive-thru speaker, speeding up service times.
The announcement was part of the company’s investor day. Executives unveiled long-term targets for its new restaurant development, plans to recruit 100 million new loyalty program members and a strategic partnership with Google.
But Kempczinski emphasized that investors shouldn’t get too excited yet about CosMc’s.
“Let me emphasize again, we’re talking about 10 stores,” he told investors on Wednesday. “The big story isn’t about CosMc’s, per se. The big story is what it says about McDonald’s and our potential. To think, a little over a year ago, this was an idea, and this week we’re opening the first test site.”
But if the test works out, CosMc’s could open across the globe.
“It’s not worth our time to develop an idea that will only work in one market,” Kempczinski said when explaining why McDonald’s created the brand.
Still, McDonald’s past efforts to expand beyond its primary business haven’t been successful. In the late 1990s, it bought Donatos Pizza and Boston Market, and a stake in a fledgling Chipotle Mexican Grill. Less than a decade later, it had divested from all three, which had become distractions as McDonald’s struggled.
Source: Business - cnbc.com
