Got recession? More importantly, got everyone thinking your company is being damaged by a recession, especially your new lower-income customer groups? If you've got all that and a falling stock, you must be Starbucks Corp. (NASDAQ: SBUX). And you must be in need of a new entry point for the cash-poor masses.Enter the dollar cup of coffee. Long an item found only on the "secret menu" (but for more than a dollar), a short (eight ounce) $1 cup of regular coffee is being tested in the Seattle area, along with free refills on all sizes of brewed coffee. It's a smart move.
In a world where even the old-timers have stopped complaining about overpriced cups of coffee, showing up with a very low-priced entry level for a regular-sized dose of caffeine makes sense. Why not see McDonald's dollar menu, and raise Starbucks' own version? It's certain that the company won't lose money on the product; costs for traditional brewed coffee are the lowest of the bunch, and baristas often throw away large quantities of coffee because it's not fresh enough. Free refills could end up not increasing the company's costs at all, and do great things for customer goodwill. It's a decision I would have made; is Howard Schultz already making waves?
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