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Will McDonald’s Corporation (MCD) Be Saved by Free Coffee?

Amid growth concerns, McDonald’s Corporation (NYSE:MCD) has decided to boost its sales by offering free coffee to its customers for two weeks starting from September 16. Bloomberg’s Betty Liu broke this news while discussing the troubles that beset the fast food chain.

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Donald Thompson, who has been McDonald’s Corporation (NYSE:MCD)’s CEO for the past two years has only seen the company’s stock price rise by a meagre 5%. Put this into context with Chipotle Mexican Grill, Inc. (NYSE:CMG)‘s sky rocketing stock price that saw a rise of 78% during the same time period and even S&P 500 (INDEXSP:.INX) gained as much as 15% over the period of two years.

The irony of the whole situation is that Chipotle Mexican Grill, Inc. (NYSE:CMG) was in fact  McDonald’s Corporation (NYSE:MCD)’s spinoff and the reason why the company made this divesture move was to focus on its core business. The delicious burgers that the company thought, their customers loved. Here is the kicker. Nobody loves those burgers anymore.

This was revealed not only in company’s sales but also ConsumerReports ranked McDonald’s 21 on the list of fast food chains according to taste and consumer preferences in July, Liu noted. The issue is not only that there are several fast food chains out there now which consequently has led to division of market share, but as the report highlights that there is something wrong with the product itself that Mcdonald’s is selling.

Moreover, it’s also past 2005 when the company could say that sales are being hit by people’s perception that their meals are a major cause of obesity. That’s an old news now and other fast food chains seem to be operating just fine.

McDonald’s Corporation (NYSE:MCD) should realise that selling free coffee is not the solution to their problem. This money would have been better spent if it were to improve the company’s fast food recipes. From the looks of it, it’s not just the burgers, that are failing McDonald’s Corporation (NYSE:MCD) but also its management.

Disclosure: none

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