Caffeine Spend Wars: McDonalds Vs. Starbucks

When I was in college, I often price shopped a good pint of beer (Yuengling, in my case) between various bars. Now, don't get me wrong. I was not just after the buzz. I was also after the extra calories that caused me to gain the freshman ten, the sophomore fifteen, and so on at the cheapest possible price. But today, I really do just need a buzz. In the morning, that is. At night, I denude myself into thinking that I'm being healthy by drinking highly tannic red wine. And I'm relatively price insensitive, within reason. Yet in the morning, just give me coffee. Any type. Ideally at a good price.

So I'm probably the target for McDonalds latest advertising tirade against Starbucks which suggests, among other claims, that "four bucks is dumb" and "large is the new grande." Translation for the addicted masses: you can still get your yuppie espresso buzz, but you can save a lot in the process by changing to us. The question is how much. When it comes to regular filter coffee, the price is "$1.40 at Starbucks" which represents roughly "a penny more than the average McDonald's brew price." But the real price differences start to brew with espresso drinks. In this arena, "a small McDonald's latte costs $1.99 compared with $2.45 to $3.15 at Starbucks".

Considering that most people load up their lattes with sugar, nasty syrups, tasteless skim milk and the like, I guarantee that 80% of drinkers will not know the difference between the two. While I suspect for coffee snobs like me, Starbucks will maintain the edge -- if not the ambiance -- it's difficult to justify a 25-55% price premium for basically the same thing in today's environment. And if that latte becomes a daily habit for you and your spouse, we're talking about a potential $750 dollar plus difference a year between the two. I may not be lovin' McDonalds espresso just yet, but my wallet is. Because they're right: when Spend Matters, four bucks is dumb.

And while I'm on the subject; don’t forget the old "make or buy" decision process -- especially in 2009. For about 250 bucks you can buy a good espresso maker with milk steamer and bean grinder. Material cost per double runs less than 35 cents and if you still feel like getting out of the office, take a walk around the block with that nice ceramic travel mug you got from a supplier over the holidays -- green, healthy and saving a bundle.

Jason Busch

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