Starbucks offers a discount afternoon java jolt
Posted
Aug 05 2008, 06:23 PM
by
Karen Datko
Rating:
Just how much caffeine does a person need in one day? Plenty, or so suggests Starbucks, which today rolled out a new nationwide promotion to entice morning customers back for a same-day afternoon fix.
It's just the latest in a series of short-term discounts and freebies designed to get repeat traffic into Starbucks' shrinking number of stores. This one was available for a test drive in several locations around the country before its unveiling today at every store.
The My Starbucks Idea Web site says:
Here's how it works: customers who make any purchase in the morning will receive a "Treat Receipt" which is good for ANY $2 Grande Cold Beverage (plus tax, where applicable) after 2 p.m. This promotion is good through Sept 2.
Sounds like a pretty good deal, since that's about half the regular price. But, as blogger Kimberly Palmer at Alpha Consumer points out, it makes sense only if you were going to have an afternoon coffee drink anyway. If you weren't, you'll be spending more money, not less.
It's well-known that Starbucks has been struggling to adjust as cost-conscious customers cut back on their premium-coffee habit in response to an uncertain economy. The company earlier this summer announced that it's closing 600 U.S. stores. More recently, it said that 1,000 office jobs will also be eliminated and that most Australian stores will shut their doors.
One-time costs associated with the U.S. store closings resulted in the coffee chain's first quarterly loss since it went public in 1992.
How is this latest promotion going over? Liz Gunnison at Portfolio.com warns that so many promotions may cost the Starbucks brand some of its luster. She writes that "any way you slice it, discounting still smacks of desperation. That's why brands like Louis Vuitton and Apple don't do it, and why Starbucks should be especially cautious about how little it takes to erode a premium image."
Starbucks seems aware of that potential with its plan to concentrate more in the future on offering rewards to loyal customers who use the "Starbucks Card." "Unlike a fast-food restaurant or a quick-service restaurant, we don't want to get into the game of happy meals and deep discounts," Starbucks CEO Howard Schultz told the Seattle Times in a recent interview.
