Starbucks brews up an afternoon drink deal
Story By: MSNBC
Source: MSNBC
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.
The promotion was previously only offered in Seattle, Chicago and Miami. The company said it is taking it nationwide beginning Tuesday to answer consumers’ calls for more value at the chain, which has seen traffic drop as gas prices rise and consumer spending falters. It runs until Sept. 2.
“I think we’ve kind of hit the nail on the head,” said Brad Stevens, vice president of customer relationship management. “It’s easy for baristas to implement and it’s easy for customers to understand.”
The move to expand the afternoon iced drinks promotion comes after Starbucks said last week it would offer more “value” in its fall and holiday offerings. In a conference call with investors, Chief Executive Howard Schultz said the company may offer deals to consumers who use Starbucks customer cards.
Starbucks has already been testing a variety of regional promotions this summer. In some cities, it has offered discounted drinks on Fridays, Saturdays and Sundays. In July, the chain also gave away 12-ounce iced coffees on Wednesdays to customers in New York City, Philadelphia, Washington, Boston and Detroit who turned over an “iced brewed coffee card,” a reusable voucher distributed in stores and newspaper inserts.
Robert W. Baird analyst David Tarantino said in an interview that the company’s push to boost traffic in the afternoon isn’t surprising since the chain has said its afternoon business has seen some weakness.
But he said whether the iced drinks promotion will work in the long term to boost traffic and make spend-wary consumers buy more Starbucks is anyone’s guess.
“Certainly a discounting approach could lead to a better perception of value in the short run but the longer-term question remains — at the regular everyday price point, would the consumer still see Starbucks as offering the right value for them?” Tarantino asked. “That remains uncertain.”
