Starbucks Could Become Bigger Than McDonald's in a Few Years
Billions and billions served
If you thought that the idea of a Starbucks being on every corner in the world was a laughable exaggeration, guess again. Starbucks will become bigger than McDonald's in the next few years, according to Mark Kalinowiski, an analyst at Nomura. "We believe that it is only a matter of time before Starbucks overtakes McDonald’s as the largest market cap restaurant stock, although likely not in 2017," Kalinowski wrote in a message to investors. So if you can't be bothered to cross the street to get a latte, just wait. A Starbucks should pop up on your side of the block within a matter of minutes.
The notion that Starbucks could become bigger than McDonald's is no small feat. Think about it: McDonald's first went nationwide in the 1950s, and opened its first international outposts in the 1970s. By comparison, Starbucks expanded nationally in the early 1990s, and opened international outposts in 1997. McDonald's was the first company to master the chain model in the first place. Within half a decade, Starbucks could eclipse McDonald's by opening 37,000 stores worldwide, compared to the 36,615 McDonald's openings that occurred as of September 2016. Although Starbucks isn't quite there yet, they will be soon.
The idea that Starbucks could become bigger than McDonald's is hard to wrap one's head around: For decades, McDonald's was the default symbol of international expansion of American culture. Hell, Naomi Klein used McDonald's as a key example of how US culture expands internationally by way of fast-food chains in her seminal book, No Logo. McDonald's became the symbol of western prosperity in the 1990s; Russia's first McDonald's franchise had lines around the block when it opened on January 31, 1990, in Moscow, and there's even a McDonald's in the Negev desert in Israel.
But by the mid 2010s, McDonald's faced an identity crisis. Second-wave coffee chains like Starbucks began serving food in addition to upscale coffee and tea-based beverages. They also designed their stores to be customer-friendly, encouraging visitors to linger inside and stay a while instead of forcing them to sit on hard plastic seats at immovable tables. Going to McDonald's wasn't a destination like it was for Starbucks, which was a status symbol in addition to a place to hang out. So as McDonald's looks to roll out more customer-friendly locations through McCafe rebrands, serving all-day breakfast, and by making McDonald's coffee better, the venerable chain still finds itself playing catch-up to its competitors.
But even as McDonald's tries to hold on to its market supremacy, it might be fighting a losing battle. Starbucks is in its ascendancy by way of new drinks, menu items, upscale coffee offerings, and a global demand for its products. There's every reason to wonder if McDonald's has hit its saturation point—an issue that Starbucks hasn't yet encountered. And if that proves true, it looks like the Starbucks logo might be a more ubiquitous sighting than McDonald's' golden arches very soon.