McDonald's (MCD) latest restaurant concept 'CosMc's' launches this week in Bolingbrook, Illinois. Yahoo Finance's Brooke DiPalma breaks down everything that investors need to know about the fast-food juggernaut's latest venture.

Concept (00:00:03)

"CosMc's is this out of this world experience that McDonald's is really hoping to win fans over with," DiPalma said. "This small restaurant concept has the DNA of McDonald's, but its own unique personality."

Menu (00:00:25)

"They're intending to solve the 3 pm slump they said with customizable drinks, you have those sweet and savory treats," DiPalma explained. "The offerings at CosMc's include new items and old favorites including the Sour Cherry Energy Burst, the Chai Frappe Burst, Spicy Queso Sandwich, and the classic Egg McMuffin."

Ordering (00:00:41)

"They have multiple drive-thru lanes. It'll give customers the opportunity to pay with a credit card at the order speaker," DiPalma said. "CosMc's employees will tell them which lane to go to in order to increase speed and efficiency."

Location (00:01:05)

DiPalma said. "Now this is just one location launching this week near their headquarters in Illinois, but nine others are set to launch in the first half of 2024 in Texas."

Future (00:01:18)

"CosMc's was just one announcement shared on McDonald's investor day," DiPalma explained. "The company also shared ambitious growth plans, a partnership with Google and plans to gain 100 million more loyalty members by 2027."

DiPalma added that McDonald's is "really looking to test this new concept, and perhaps go up against the big guys" like Starbucks (SBUX), Dutch Bros (BROS), and Wendy's (WEN).

Video Transcript

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BROOKE DIPALMA: CosMc is this out of this world experience that McDonald's is really hoping to win fans over with. Now, they did tease it back in July. This small restaurant concept that has the DNA of McDonald's but its own unique personality.

That personality we now know, CosMc, that outer space alien character. Now, they're intending to solve the 3:00 PM slump here, they said, with customizable drinks. You have those sweet and savory treats.

Now, the offerings at cosmic include new items and old favorites, including the sour cherry energy burst, the chai frappe burst, spicy queso sandwich, and the classic Egg McMuffin. They have multiple drive-thru lanes. It'll give customers the opportunity to pay with their credit card at the order speaker and then they'll be able to choose or rather McDonald's CosMc employees will tell them which pickup lane to go to in order to increase speed and efficiency. So if your order is a bit more complex, perhaps you'll go to another window.

Now, this is just one location launching this week near their headquarters in Illinois, but nine others are set to launch in the first half of 2024 in Texas. And this is all just a pilot. McDonald's will assess it for a year and see where it goes.

CosMc was just one announcement. Shared on McDonald's investor day, the company also shared ambitious growth plans, a partnership with Google, and plans to gain 100 million more loyalty members by 2027. McDonald's CEO did say that, you know, don't get too excited here. It's just 10 stores. He said this is more so about the potential that McDonald's has to build another concept.

But you can't help but think of Starbucks really looking to get customers in the door during that 2:00 to 3:00, the afternoon hour, of course. You also have Dutch Bros. You have Wendy's that serves coffee all day.

You also have Restaurant Brands International, brands like a Tim Hortons. You have a Dunkin'. So really looking to test this new concept and perhaps go up against the big guys who know the space very well.

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