In the annual meeting today, Starbucks chief Howard Schultz vowed to "fight to the death" against Dunkin' Donuts, McDonald's, and other competitors for coffee-and-baked good supremacy. While we've already seen many of the weapons he plans to use in this battle -- better-smelling stores, for instance (without warmed breakfast sandwiches, with fresh-brewed coffee), a reduction in the number of stores too near one another, and a campaign to increase the quality of the baristas -- today marked the introduction of several yet newer and even more desperate ones.Chief among today's weapons is the loyalty card. Starting in about a month, Starbucks Corporation (NASDAQ: SBUX) will introduce a number of discounts for customers who use their Starbucks card to pay, and register it on the web site. (Excuse me while I run to my junk drawer to unearth my card that has $0.16 left on it.) Free "customization" is one perk -- extra syrups and milk substitutions will be gratis. Another perk is free refills on brewed coffee, and the possible expansion of the $1.00 coffee test. Schultz didn't mention whether or not the company would be offering free drinks upon the purchase of 10, or 15; though this is a perk already in place used, and discarded, at licensees in Safeway stores (the data comes from the Safeway Rewards card) and, of course, is working with punch cards at just about every single independent coffee shop in the nation.
Along with Schultz' frightening war imagery was the very real specter of the looming recession. Schultz said the economy is in a "tailspin," his consumers, "in a recession." The way we're all responding to the "tough" times, evidently, is by refusing to pony up $3 or $4 for a beverage on such a regular basis -- I, too, have avoided the coffee shop far more frequently these past months.
It hardly seems that a new coffee blend and an automated beverage machine will be the cure-all for your economic woes (maybe all the time you save waiting in line for the barista, you can spend looking for a new job?), but it's certain that changes are still needed. Investors aren't the least bit impressed; they sent the stock down another 74 cents, or 4.06%, to $17.50 today, only a touch off the 52-week low of $16.77.
It hardly seems that a new coffee blend and an automated beverage machine will be the cure-all for your economic woes (maybe all the time you save waiting in line for the barista, you can spend looking for a new job?), but it's certain that changes are still needed. Investors aren't the least bit impressed; they sent the stock down another 74 cents, or 4.06%, to $17.50 today, only a touch off the 52-week low of $16.77.
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Reader Comments (Page 15 of 15)
3-21-2008 @ 1:24AM
jojo said...
I used to wake up in the morning thinking about the latte I would get on my way to work. It was frothy, hot, perfectly made. I quit going to Starbucks about 2 years ago, after getting a latte 5 days out of 7 on my way to work. The service had declined, the latte was not a latte, but rather hot milk and bitter coffee. The only thing that didn't change was the taste of the vanilla. The barista's for the most part socialized behind the counter with one another, got my drink wrong and then got annoyed when I asked for more foam on top of my hot milk. Starbucks has lost it from the way they did coffee 12 years ago, which was about the time I was first introduced to what is now referred to as the "skinny" latte. "Used to be a great way to start the day, ambiance and all. Now I stop at 7 eleven, get a vanilla frap and I'm on my way for $1.49. I think this franchise is going down eventually if they don't get back on track...recession or no recession.
3-21-2008 @ 2:30AM
su said...
I personally don't drink the stuff (most people I know say it tastes burnt) but I do admire the fact that he provides medical, dental, and profit sharing to full AND part time workers, hopefully they will be able to continue to do so.
3-21-2008 @ 9:08AM
Clint said...
It is very obvious why people who work in any public restaurant either serving coffee or a hamburger receives a tip from the consumer.
And I really believe a business that serves the consumers rely's on all employee's serving the public that they present themselves effectively to make the consumer want to come back and do more business.
When a customer leaves a tip is usually because they were waited on in a very good service manner.
3-21-2008 @ 11:44AM
Jimbo said...
Starbucks does NOT support the troops, what SNOPES doesn't tell you is that their official policy is not to donate at the corporate level. Well, any corporation can change their own policy, just ask the CEO. He's changing policy right here in this article...no?
However, Starbucks did donate double digit millions of dollars and tens of thousands of tons of coffee to Katrina victims in violation of this selfsame corporate policy.
This is public information available on their website.
So please stop insulting my intelligence with your propaganda driven pseudo-denials.
3-21-2008 @ 1:26PM
Daisy said...
I don't know what Starbucks you guys all go to but the one I visit is clean, the crew is friendly and the coffee is great. Yes, I do have a hard time paying $4.00 for a coffee sometimes, but then I remeber it's not just coffee. I'm helping a company that actually cares about it's employees. Even a part time employee has health care benifits and the option to have a 401K. How many companies will do that?
3-21-2008 @ 3:37PM
USMC said...
Jimbo, you're a moron.
No major corporation is going to weigh in on supporting or not supporting the "WAR", that is bad business.
That is not the same as supporting the TROOPS. Which Starbucks does.
Nobody needs to insult your intelligence, you seem to be doing that fine on your own. ;)
3-22-2008 @ 10:17AM
Raquel said...
I don't know what you guys mean by lack of customer service. I'm always impressed by the sincere friendliness of the staff when I go to Starbucks...even early in the morning! I'm not as nice as any of these folks at 7 am!
3-31-2008 @ 12:53PM
JOAN ELMENDORF said...
YES I LIKE DUNKIN'S AND TIM'S BETTER THAN STARBUCKS BUT WHAT REALLY BOTHERS ME IS THAT THEY CHARGE ME EXTRA FOR SOYMILK RATHER THAN CREAM, MOST COFFEE PLACES DO NOT. DOESN'T CREAM COST MONEY. SO I WILL DRIVE, WALK, RIDE FURTHER AND PASS UP STARBUCKS FOR THE OTHER PLACES.
3-31-2008 @ 2:44PM
Karen Willoughby said...
I've been to several Starbucks since they held the emergency training and find that the quality of help has actually deteriorated. Such as 3 employees standing around the register chatting while just 1 employee is making the drinks for both walk in and drive through customer. Some have a very disinterested attitude for customer service.
4-01-2008 @ 12:39PM
dumbfounded said...
I am facinated that people care so much about something this ridiculous to comment with multiple paragraphs of mind numbing verbiage. And if the coffee is so bad, why would anyone want it to be sent to our troops??????