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Report: McD disputes impression of faltering espresso test

NEW YORK McDonald's push toward a U.S. systemwide rollout of espresso-based beverages has expanded fitfully to 1,700 restaurants, with internal data suggesting that sales in most of the chain's six major test markets have fallen, sometimes sharply, following peak volumes attained three weeks after initial deployment, The Wall Street Journal is reporting today.

The newspaper said its review of company documents indicated that the average McDonald's branch in the Kansas City, Mo., market, for example, had sold 359 of the specialty coffees per week in early December, but saw the number fall to an average 217 per location by the last week in June.

The Journal quoted a McDonald's Corp. spokesman as saying the data gave an incomplete picture and that sales in most of the major test markets are at least on par with the company's expectations.

Acknowledging that the chain hadn't put the full force of its marketing behind the espresso drinks, the Journal noted that patrons may be purchasing separately tallied iced coffees during the summer months.

McDonald's officials have projected that the chain's addition of a broad range of specialty beverages, including the $3-average espresso drinks, could garner an extra $125,000 in annual sales per location, but some franchisees are known to have questioned investment costs for equipment and building modifications.

In May, Crain's Chicago Business cited its review of internal McDonald's documents as indicating that per-location sales averaging 300 drinks per week in the Michigan and Kansas City test markets during the four weeks ended March 6 had fallen far short of levels needed to attain the $125,000 annual goal. That conclusion was disputed by at least one franchisee involved in the test.

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