Somehow Starbucks will reframe this period of the corporate history as a time when the coffee giant was sensitive to their customers’ needs and economic pressure. Starbucks is offering discounted iced drinks in the afternoons:
“NEW YORK (AP) — Looking to bring more value-seeking consumers through its doors for a late afternoon caffeine fix, Starbucks Corp. said it will now offer its morning customers any iced grande beverage for $2 after 2 p.m.
The price is a big cut from the normal price of most grande-sized iced drinks. A grande iced latte, for example, costs about $4. To get the discount, customers must present a receipt from their morning Starbucks visit.”
link: Starbucks Offers Afternoon Drink Deal Nationwide
The reality is that Starbucks is feeling the economic turndown. There are store closings, nationally and internationally. It is a time of ‘negative growth’ and those store which have been identified as “underperforming” are being closed.
The corporate woes are reflected in Starbucks third fiscal quarter:
“…The caffeine dealer reported a loss of $6.7 million, -1 cent per share, compared with profits of $158.3 million, 21 cents per share, for the same period a year ago. Schultz’s big plans for the company cost investors 17 cents per share. Excluding the charges, the company earned 16 cents per share. Revenues increased 8.3% to $2.6 billion from the year-prior period…”
link: Starbucks Gets Roasted
An unprecedented loss in the financials catches shareholders’ attention – especially when the difference from a year ago is a hundred and sixty five million ($165 million) dollars. It seems that Starbucks is willing to lower profits margins for their afternoon customers and hope that it maintains customer loyalty, even when much of what was people’s disposable income is used now to pay necessities like fuel and groceries.
Catherine Forsythe