(Monica Eng/Chicago Tribune)

Reuters | Despite efforts by McDonald’s to undercut competitors on price, Dunkin
Donuts’ market share in coffee is steady and growing.

“The big
hurt has not been Dunkin to McDonald’s or McDonald’s to Dunkin,” said
Mark Nunnelly, managing director at Bain Capital. “It’s been Dunkin and
McDonald’s to your local fill-in-the-blank convenience store.”

Nunnelly, whose firm is one of three private equity owners of the
doughnut chain, said Starbucks has been hurt the most by the price war
and the weak economy.

“The higher-priced players at $4 or $5 for a latte have obviously had
the toughest year through the crisis,” he said. “The more accessible
price point players like Dunkin and McDonald’s have fared better through
that period.”

More consumers are trading down from expensive drinks to cheaper plain
coffee rather than switching among the various outlets, he said.

“If you look at Dunkin’s comps in coffee and McDonald’s comps in coffee,
I think you would say you’ve got a pretty loyal set of customers both
places, that the price points aren’t different enough,” he said.

Oak Brook-based McDonald’s has said strong sales of its McCafe line of coffee drinks were in
part responsible for a surprise 1 percent increase in same-store sales in
December. January U.S. same-store sales declined 0.7 percent, however.

Coffee wars heat up, but Dunkin' Donuts thrives | Chicago Breaking ...