Starbucks Has a Plan for Cheap Coffee Drinkers

There's a second act brewing for Starbucks' (NASDAQ: SBUX  ) Seattle's Best Coffee.

The baron of baristas opened 10 Seattle's Best Coffee stores on Monday, but they won't be gunning for the customers of its larger sister store. The stores don't have dine-in areas. We're talking about small boxes with drive-thru service and a walk-up window. All but two of the locations are inside Wal-Mart (NYSE: WMT  ) parking lots, a pretty fair indicator of the target audience here.

Starbucks is hoping to woo thrifty coffee sippers, making this more of an attack on McDonald's (NYSE: MCD  ) , which has gained steam with its McCafe line of flavored but inexpensive coffee drinks. Dunkin' Brands (NASDAQ: DNKN  ) is also a target given the small-box nature of Dunkin' Donuts.

In this video, longtime Fool contributor Rick Munarriz explains why this is a smart move by Starbucks.

Caffeinated research
Despite its McCafe-fueled buzz, McDonald’s turned in a dismal year in 2012, underperforming the broader market by 25%. Looking ahead, can the Golden Arches reclaim its throne atop the restaurant industry, or will this unsettling trend continue? Our top analyst weighs in on McDonald's future in a recent premium report on the company. Click here now to find out whether a buying opportunity has emerged for this global juggernaut.


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Related Tickers

9/27/2016 11:38 AM
SBUX $54.02 Down -0.02 -0.04%
Starbucks CAPS Rating: ****
DNKN $50.20 Down -0.44 -0.87%
Dunkin' Brands Gro… CAPS Rating: ***
MCD $116.65 Up +0.12 +0.10%
McDonald's CAPS Rating: ***
WMT $72.21 Up +0.59 +0.82%
Wal-Mart Stores CAPS Rating: ***