
As promised last week, here it is: Starbucks Corp. (NASDAQ: SBUX) and the "breakfast pairings at an attractive price," a.k.a. value meals. For $3.95, customers can purchase either a 12-ounce (tall) latte with a coffee cake or oatmeal; or a tall coffee with a breakfast sandwich. What's more, the company is rolling out new (to some areas) "artisan" sandwiches with bacon and ham, no, let's let Starbucks describe it: a "flavorful bakery-style sandwich made with a parmesan egg frittata, smoked bacon slices, and Gouda cheese on a perfectly-baked hand-shaped artisan roll;" and "a delightful combination made with a parmesan egg frittata, three slices of Black Forest ham, and mild cheddar on a perfectly-baked hand-shaped artisan roll." The new menu options and pricing will be available March 3.
In a detailed look at the "breakfast pairings," The Wall Street Journal's Janet Adamy called this "the first move in an aggressive campaign to counter the widespread perception that Starbucks is the home of the $4 cup of coffee." Well, yes, there is some of that; it's clear that the "four-bucks" moniker is worn with a heavy heart by Starbucks management in this environment of cost-cutting and an ever-more-varied assortment of marketing messages along the lines of, "just one fewer fancy coffee drink a month!" (most recently heard in an NPR pledge drive). It's a good thing to convince customers that shopping at Starbucks is a budget choice, with wording seemingly written by Melville himself (or, rather, a public relations professional who always wished she was a poet): "the pairings offer a value beyond price."
I wrote last week that this was an "obvious ploy to attract customers who have been wooed away from Starbucks by McDonald's lower prices and less pretension." Could it have been worse than I thought? Not only is Starbucks rolling out coffee + muffin sandwich combinations for a bargain price just under $4.00, but it's also virtually duplicating the different varieties of McMuffin, except with fancy-schmancy Starbucks language.
As Marketplace's Scott Jagow says, "This... reinforces my prediction that Starbucks and McDonald's are hurtling toward some kind of galactic war in the year 2030. Either that... or a merger."
Much though I love the galactic war concept, it looks like Starbucks and McDonalds are just endlessly duplicating one another, until they completely overlap in some unholy combination of green and yellow, mermaid and clown.
It's untrue that Starbucks has done nothing to set itself apart (nothing, that is, beyond high-falutin' language). The option to choose a latte and an oatmeal is, while not the most wholesome food on the planet (the oatmeal's of the instant variety), certainly a more healthful option than anything available at McDonald's. And while McDonald's goes on about its budget-consciousness and the "premium" taste of its coffee, I've never heard word one about how the coffee is grown or purchased, a major concern for me. And Starbucks mentioned that in its press release; "starting this spring, all of Starbucks espresso-based drinks in all Starbucks stores in the U.S. will be made with 100% responsibly grown, ethically traded Starbucks Espresso Roast coffee." All other things being equal, I'd pick Starbucks for that reason (though the company could go a lot farther with the beans used in its drip coffee).
Investors, however, seemed optimistic -- and oblivious to the jokes on StarbucksGossip about "Venti-sizing" a value meal and wondering why Starbucks wasn't going to "force customers to learn to spout some ridiculous, made up language to get the discount? ... "I'd like Hammittino Muffino Economoso" combo, please!" By the end of the days' trading, Starbucks was up 18 cents, or 1.71%, to $10.72, several dollars above the stock's recent low.











Reader Comments (Page 1 of 1)
2-09-2009 @ 7:07PM
ben said...
Why would Mcdonald's want to merge with Starbucks.
Starbucks is just an overrated coffee shop.
2-10-2009 @ 2:14AM
Patrick said...
Maybe Starbucks should start calling their drink sizes more realistic names. Tall = small? They're naming convention just tells me that they like to lie or grossly exaggerate the truth!