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McDonald’s announced over the holiday weekend that the five stand-alone CosMc’s locations it operates will shut their doors starting in late June as part of what the company called the “next testing phase.”
“Building on the insights gained from the pilot standalone locations, CosMc’s-inspired flavors will be landing at McDonald’s as part of the upcoming US beverage test,” McDonald’s also said.
Still, when the chain launched with fanfare in late 2023, some predicted it was trying to bring the fight to Starbucks (SBUX-6.61%) and Dunkin by offering more customizable coffee options. And even as recently as January, McDonald’s teased that two new locations were planned for Texas.
In the opening month of operations, Placer.ai data found that the first location in Bolingbrook, Illinois, doubled the visits typical for a McDonald’s location.
“It was immediately apparent how much interest CosMc’s was drawing, as the drive-thru lane spanned roughly 80 vehicles upon arrival,” according to The Anchor, Placer.ai’s content hub, upon visiting the store in January of 2024.
Brand strategist Reilly Newman told Quartz that he was a fan of the CosMc concept but that the already saturated marketplace doomed the attempt at a new entry.
“The brand was very iconic and well done, but I believe the attempt to enter the beverage market was simply too tight with strong brands like Starbucks, Dunkin’, Dutch Bros (BROS-3.03%), and even 7-Eleven making strides on all fronts,” Newman said.
Newman also said that with five locations the concept was clearly still just in the “testing” phase, but the chain will be able to use what it learned and incorporate it into the main brand.
“The CosMc’s brand may not be worth its own store, but the ‘mode’ that CosMc’s can capture would be worth wrapping within the McDonald’s offering,” Newman noted.
“Allowing CosMc’s to be the beverage arm of the McDonald’s experience could help elevate beverage perceptions because of the ‘niche’ to which it would be dedicated. The power here is leveraging sub-brands similar to the strategy Costco (COST-0.22%), Trader Joe’s, and Target (TGT-0.70%) have proven effective,” Newman said, adding that the experience may also help the concept gain more traction to then roll out smaller footprint storefronts like Dutch Bros and other brands have deployed.