McDonald's shuts down its spin-off, CosMc's, after less than 3 years as sales lag

Core Insights - McDonald's is closing its CosMc's spin-off line of Starbucks-style drink shops, which was initially launched in 2023 as a small format beverage-focused concept [1][3] - The decision to close CosMc's comes amid declining sales, with US same-store sales dropping 3.6% in the first quarter [3] - The company plans to integrate successful flavors from CosMc's into the main McDonald's experience, indicating a shift in strategy rather than a complete abandonment of the beverage market [3] Group 1 - CosMc's was designed to test new beverage flavors and technologies without affecting the existing McDonald's experience [3] - The menu at CosMc's included a variety of drinks and food items, such as coffees, teas, and breakfast sandwiches, aiming to create a unique identity while retaining McDonald's DNA [2] - Economic uncertainty has led to reduced spending among low and middle-income diners, impacting McDonald's sales performance [4] Group 2 - The closure of CosMc's will begin in late June, and the associated app will also be discontinued [1] - CEO Chris Kempczinski emphasized the need for McDonald's to adapt to changing consumer behavior, as customers are becoming more selective with their spending [4] - The company views the CosMc's initiative as a valuable learning experience for future beverage offerings [3]