McDonald's hopes new cold drinks will be hot

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McDonald's hopes new cold drinks will be hot

May 17, 2010
Think of McDonald's and the first thing that pops to mind is a burger — and fries.

Think again. The nation's largest fast-food chain is on a multibillion-dollar mission to become a serious beverage juggernaut, too.

In the process, it's turning the fast-food world upside down. It's trying to redefine consumer habits for the simple act of stopping for a drink. And that's pitting it against convenience stores, supermarkets and specialty coffee chains such as Starbucks.

The chain has slowly been rolling out iced frappés only since March, but CEO Jim Skinner already credits April's impressive 3.8% same-store sales boost, in part, to frappés.

Now, smoothies are on tap.

Beverages are certain to be discussed at what's expected to be a very upbeat annual meeting in Oak Brook, Ill., on Thursday. McDonald's has seen impressive growth and improved same-store sales while most rivals have struggled over the past few years.

Expanding the beverage line into pricier drinks is seen as a way to boost check averages as well as lure customers to McDonald's for snacks during slower parts of the day, such as afternoons. But the company's growing beverage platform also raises this question: Is McDonald's straying too far from its roots?

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