At select Starbucks stores in Seattle, you can buy a cup of joe for a buck.
Ssssshhhh.
It's a new initive by ex-CEO-just-recently-unretired-because-of-falling-stock-prices Howard Schultz. Starbucks is hurting, and something needs to be done.
But who goes to Starbucks because of it's "cheap" prices??
A year ago, Schultz wrote a bitter memo to his executives about what he calls "the watering down of the Starbucks experience." He complained that the soul of Starbucks was gone, and urged the higher ups to bring back customer service.
So he's back in action, determined to change the coffee giant's luck.
There's no question Starbucks is in trouble. In the past year and a half, stock prices have fallen nearly 50%, from a high of $39.63 in May 2006, to closing at $19.66 today. Schultz blames the company's out of control growth. Also ailing are skyrocketing milk prices, the troubling economy, and pressure from McDonald's.
But why dollar coffee?
Isn't that the turf of McDonald's?
But the answer is...not really.
Mickey D's recently announced plans to open "McCafe's." In other words, coffee bars featuring cappuccinos, lattes, and mochas whipped up by baristas, a la Starbucks.
This, after Starbucks added drive-thru windows and hot breakfast sandwiches.
It seems the two mega chains are going after each other... by coping each other.
McDonald's is upgrading, while Starbucks seems to be.. well, downgrading.
The dollar cupajoe seems to be an effort to get crowds in the door, but in the move Starbucks is moving away from it's brand.
Starbucks is the king of $6 cups of coffee. They survived the economic downturn of 2001, when analysts feared the worst for a company who prides itself on hoity-hoity coffee. Starbucks customers LIKE that they shelled out bug bucks for their latte. The well known siren laden white cup is almost a status symbol, recognized in all corners of the world.
Starbucks needs to go back to the "third place." Howard, get rid of the drive-thrus, the expensive merchandise, and the cookie cutter stores. You don't need to sell your coffee for a dollar.