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 5 of 15)
3-20-2008 @ 10:12AM
sharon said...
Dunkin Donuts is the best coffee ever.
3-20-2008 @ 10:12AM
Jessica said...
Here's an idea...If you want to sell more coffee, make it taste better. Starbucks coffee is way too bitter. Another Idea....If they don't feel like changing the way it tastes then lower the price, cuz I certainly don't want t spend $3.50 on a cup of coffe that tastes like shit when I can go down the street to Dunkin' Donuts and get a good cup of coffee for two bucks cheaper.
3-20-2008 @ 10:16AM
Christine said...
Hey, #5, Bob....get your facts straight. It didn't happen. That's just another email hoax, straight outta someone's overactive imagination (or maybe a disgruntled ex-barista?). When you get emails telling you about ANYTHING that supposedly happened, go to truthorfiction.com FIRST, BEFORE you hit that "forward" button.
3-20-2008 @ 10:21AM
wahoward said...
Starbucks coffee...ick!
3-20-2008 @ 10:55AM
Andrea said...
I'll drive past a plethora of Starbuck's locations to drink a supreme cup of joe from the local food co-op. Not only is the coffee organic and fair trade (a concept not embraced by Starbucks), but the baristas have exceptional technique, beyond the pushing of a button.
3-20-2008 @ 10:26AM
Sharen said...
Quit being so egotistical and lower your coffee prices! It's really a no brainer. it's NOT gold people are buying at Starbucks. This is hard economical times. This is the only way Starbucks is going to survive. If you want to be different from your competitors, lower the prices. THEN everybody else will wonder how Dunkin Donuts et al can sell their coffee for much higher! After all, Starbucks set the price structure for other retail establishments in setting their price structure. Also, I would recommend having an express lane in the Starbucks. Nothing worse than wanting just a cup of brewed coffee and then having to wait 15 mins. for the 2 people in front of you to get their custom drink made. Free refills would be a big plus too!! Just try it and see if this will make the shareholders happier!
3-20-2008 @ 10:27AM
freda said...
i'm so sick of hearing starbucks doesn't support the troops. my assistant manager was in the national guard and makes a point of involving our store in sending coffee overseas. i believe most of the other stores in my region do the same. that stupid letter was an anti-sbux hoax, in case you didn't know. if you want your local sbux to send coffee to iraq/afganistan/korea/germany/kosovo/india/wherever our troops are because they are in all of those places today, approach your local starbucks and ask them if they would be willing to donate coffee. they might just set up a general donation box for everyone to donate, because it is more expensive than you think to just give coffee away, especially in this economy(i used to get 28 hours/week, i'm lucky if i get 18). individual sbux baristas are also usually more than willing to donate their 1lb/week coffee markout.
however, in case you were unaware, there are sbux's on fob's in iraq. soldiers have to pay for subway and burger king there, i think they can stand to pay for sbux and let stateside donations just be donations. if you're going to boycott sbux over this whole coffee to the troops bs, do some research first.
btw, i've sent donations to the troops in iraq and afganistan. that place was a hellhole until quite recently, so my class and i sent basics like razors, gum, deoderant, etc. they have all of that stuff available to them, and more(people are coming home with tellys), but they would really appreciate letters.
3-20-2008 @ 11:48AM
Jenine said...
Fight till the death for coffee dominance?? That statement right there is a turn off. Sometimes I like my Dunkin Doughnuts coffee with a jelly doughnut after a cold day of shopping. Nothing beats that. And sometimes I like a frapuccino with a pita at Starbucks -but at their prices, that is not often. They do not dominate. Why does it have to be about dominating and not just about making some good old fashioned coffee?
3-20-2008 @ 10:29AM
Bob said...
I do not have stock in McDonals's but their top of the line coffe for about $1 equals the quality of Starbucks. There aren't enough yuppies in the world to keep this company afloat with their $3.95 cup of coffe in the same paper cup as McDonald's. Start start selling hamburgers or something.
3-20-2008 @ 10:31AM
Erin said...
KEEP FIGHTING STARBUCKS!
I am a avid visitor of Starbucks. You can't possibly compare Starbucks coffee to that of McDonarlds or Dunkin Doughnuts. Sorry....not even close. I will continue to pay the $$$ for Starbucks because personally, it tastes alot better and better variety.
It's very simple...if you are complaining about the price then don't buy from there. I haven't been to a Starbucks in my town where it's been "dead" yet. So apparently people want it.
To the idiot(s) about Starbucks and the whole Soldier thing...READ UP! It's not true. Check out snopes.com. Do you really believe every Email that is "forwarded" to you? C'mon.
3-20-2008 @ 10:34AM
CoffeeShopGirl said...
I have worked at a Starbucks for three years, throughout my time at college. I have no problem admitting that the coffee is quite expensive. I have always encouraged my customers to brew (our coffee, or course) at home. It is cheaper and, for those who think our coffee is too dark/strong, easier to customize. But people go to coffee shops for the convenience. Plain and simple.
The trouble with customer service is very unfortunate. I'm not going to say the baristas don't have any part in that particular problem, because we admittedly do, but at the same time, if I am treated like an imbecile and a "mere button-pusher," it is hard to motivate myself to go the extra mile, especially when I have been up since 4:30 in the morning. The bottom line is this: treat your baristas with respect and dignity, and we will return the favor.
As for Starbucks employees being arrogant...I have never had a customer complain when I explained why different coffees have different undertones, flavors, acidity, etc. If you are willing to shell out the cash, don't you want to know exactly what you are paying for and know for a fact that the person making it is at least knowledgeable enough to answer some basic questions?
3-20-2008 @ 10:36AM
Art said...
Amy you clearly take pride in your job and I'm glad someone who actually works at Starbucks is chiming in here. Keep up the good work and thanks for being the kind of barista I look forward to getting my Cappucino's from! I do think the hot cappucino should be experienced by most coffee drinkers though it is not for everyone, I understand... but the Cappucino is the queen of a coffee savoring experience. It is natually sweet and smokey at the same time and if you get it more "dry" you get a heaping of fresh sweet foam with few calories. (for an extra buzz go with two shots expresso - a reg size normally comes with one) Starbucks doesn't emphasize the savoring experience and hasn't taught its' baristas to offer drinks in ceramic cups. They have also taken away some of their better pasteries, ie. the expresso brownie and the reduced fat banana chocolate chip coffee cake. Bad move! And as mentioned before, prices for latte's will be higher because they are practically ALL milk which itself has gone up in price. I am not a latte drinker and have never understood getting a coffee drink when 3/4 of it was milk but that is just me. Try a hot cappucino for alot less and get it in a real cup if you have time to stay. (also request a spoon - to dig out the yummy foam!)
3-31-2008 @ 1:01AM
freda said...
can we please stop calling lattes and frappucinos "coffee"? coffee is that stuff you get when you run hot water over coffee beans. those drinks are espresso-based. they have milk, and syrups, coffee doesn't usually have that. you're not paying loads of money for a actual coffee though. honestly, if you can't afford it, quit whining and save that money. that's like saying espensive restaurants should lower they're prices so you can afford to eat there anytime. of course you're paying for better quality food, but you're also paying for the experience. again, like asking disneyland to lower admission so you can afford to take your kids their anytime. americans should be required to take basic economics courses so they can realize that a dollar spent is a dollar spent and it's never coming back. sbux should not be the conernerstone of your daily sustenance to begin with.
3-20-2008 @ 10:46AM
Phyllis Presley said...
I THINK STARBUCKS and other coffee establishments are the new place for people to meet and mingle.
Starbucks is trying to appeal to the public again.
I think that Starbucks should hire DiVado as people love him. He wrote a song "The Java Jitter" and it is great and fun. He went to over 200 Starbucks and sang his song. Check it out on YouTube, "The Starbucks Rejection Tour" and ENJOY
http://www.youtube.com/watch?v=Z4y78gxev2I
let me know what you think, thanks Phyllis
3-20-2008 @ 10:39AM
moonchild1250 said...
Flag waving, pride, war, patriotism, arrogance, denying free speech, torture, denying due process, secret prisons, surveillance, wire tapping, greed for oil, 12 billion per month for a war based on weapons of mass destruction that don't exist, etc. etc. So, now we have the highest gas prices in history, the highest unemployment rate since the great depression, out of control credit card debt, record foreclosures which is called an unprecendented housing crisis, companies cutting back or major names going out of business, record tornadoes and hurricanes, bees disappearing, glaciers melting, etc. etc. Well, people, you got too right-wing for your britches, and now paybacks a bitches!
3-20-2008 @ 10:38AM
hopeless addict said...
people...people...people...Were talkin about coffee here...COFFEE...It aint THAT important...It aint THAT hard to find...This image confused nation is always making fun of the French...wrongfully...and then it pays for ONE cup of coffee what would buy them 15 cups of coffee at a normal shop...all because starBucks gives that faintest of illusions that the coffee drinker is in a French Cafe...GROW UP!...and while we are at it...when you buy a Can of coffee at the grocery store...the words DEEP ROASTED means...THEY BURNT THE BEANS!...and the cheap store brand is just as much Coffee and the brand names for which you pay Twice as much...Stop being advertising Sheep!...Wasteing your money on an expensive car will NOT get you the girl...buying Just the right pair of shoes will not make you a Goddess...Eating Special K will not make you thin...WAKE UP AND SMELL THE COFFEE!!!!!!!!!!
oh good, its done brewing, talk to you later...
3-20-2008 @ 11:08AM
moonchild1250 said...
Now even Starbucks is going under! Well, let's see, it all starting with flag waving, pride, war, patriotism, arrogance, denying free speech, torture, denying due process, secret prisons, surveillance, wire tapping, greed for oil, 12 billion per month for a war based on weapons of mass destruction that don't exist, etc. etc. So, now we have the highest gas prices in history, the highest unemployment rate since the great depression, out of control credit card debt, record foreclosures which is called an unprecendented housing crisis, companies cutting back or major names going out of business, record tornadoes and hurricanes, bees disappearing, glaciers melting, etc. etc. Well, people, you got too right-wing for your britches, and now paybacks a b-tches!
3-20-2008 @ 10:40AM
lin said...
All these comments about Starbucks and our military are not true.
Please go to snopes.com to check this out.
Unfortunatly, this is nothing but another nasty
urban legend.
As for Starbucks and their future success...
much will depend upon our economy. The
days when people had disposable cash to
spend for coffee costing $3.50 and more
a cup may be gone for a while. That disposable
cash is being eaten up with the higher cost of
gas, the food prices in our supermarkets, and
the cost to heat homes.
3-20-2008 @ 10:40AM
Mike said...
My lord, some of you people are like sheep. Some guy comes on and posts in all caps that Starbucks wouldn't give coffee to soldiers in Iraq, with no substantiation whatsoever, and everyone takes it at face value. That right there is what's wrong with this country. How can people not trust most people but can trust some guy named Bob that types in all caps with poor grammar?
I HATE Starbucks. I repeat - I despise it with a burning passion. Coffee is water filtered through beans. I make mine at home or buy Dunkin Donuts coffee. But honestly, don't you think some evidence is needed before you start condemning Starbucks as unpatriotic? How many times does an urban legend like that have to go around before people wake the f*** up?
3-20-2008 @ 10:42AM
Donna said...
Having been a Starbucks store manager for 4 years and still believing in the company, it pains me to see them having these problems. However, I am not surprised after visiting my local Starbucks down the street from where I now work. Recently I have had to rely on the barista art of blending a frappucino to get a quality drink there. (and most times even IT has ice chunks!) I agree with the person who said that quality has gone downhill since the installation of the automatic machine. I hate to sound like my parents here, but "when I, as well as my partners, were making espresso beverages we had to pull the shots by hand and throw away any shot not pulled at the allusive 18-23 seconds. Let me tell you there were many shots tossed down the drain in my day just to make sure the drink was right. They've simply lost the very thing that made them special. As an ex-partner I hate to complain about my drink so often, therefore I simply don't order them anymore. My advice to Howard is to hire managers who will enforce the guidelines strictly and stay true to the founding statements and the company will turn around. Drink standards, friendliness, and the entire Starbucks experience does trickle down so it all starts with the store manager! I had one parking space in front of my store and customers literally had to risk getting a parking ticket to visit me and still I was the busiest store in my town!