McDonald's shuts down CosMc's restaurants after failed Starbucks competitor test
McDonald’s will shut down all CosMc’s pilot locations starting in late June, signaling the end of its short-lived attempt to break into the competitive specialty beverage market.
All of its CosMc's outlets will be closed after McDonald's confirmed the closure of every restaurant in this drink-focused concept which was launched to tackle Starbucks and Dunkin'. The actual closure will happen in late June, and the plan is to do so on a rolling basis. Same with the CosMc's mobile app, which is supposed to be shut down.
What the company is saying is that it is going to take an learnings from the CosMc's pilot to existing restaurants, and the company is going to test CosMc's-inspired flavors in -- what it refers to as -- a new beverage test later in the year in the United States, but the company doesn't offer a timeline.
ALSO SEE: Historic San Francisco hardware store to close after 120 years following pandemic and retail shift
The beverage push and a changing strategy
Founded in 2023, CosMc's appealed to younger, busy consumers, with a focus on drinks like boba teas and churro frappés. McDonald's opened up eight pilot locations, one being in Illinois and seven in Texas, from their original planned 10 in Texas (the last three were ultimately dropped). By the time they announced the closures, only 5 were still open to operate.
The closure announcement came on the heels of a rocky launch period, and the launch period included a global consumer boycott of McDonald's for its ties to Israeli franchises. McDonald's did not indicate whether this contributed to the closure decision, however, the timing did negatively affect consumer perception of the concept.
McDonald's is a fast food chain that is very well known worldwide, and has been implementing changes for several years. Photo: Hindustan Times
Insights from the test and future implementation
In a statement issued on May 23, McDonald’s characterized CosMc’s as an “innovation incubator” which enabled the brand to test new flavors, processes and technologies while not disrupting the brand’s primary focus. The company suggested that while it it done its job, it will not continue to operate.
Industry experts, including analyst David Henkes, observed that the closure was not unexpected, given that McDonald’s designed CosMc’s so that it could potentially add successful products to the overall brand. It’s unclear to what extent products from CosMc’s will be incorporated into the standard McDonald’s brand, but it expects to make additional announcements soon.
