As read in the WSJ today, Starbucks is just another company who is losing steam during this economic crisis. The hip coffee chain closed hundreds of locations within the past few months, but instead of closing even more in the near future, Starbucks will be placing a new emphasis on retaining customers, cutting costs and promoting the value of its products.
I must give Starbucks props on their new tactic of retaining customers though. Their new loyalty card. Customers who get this card, a free purchase but with an annual fee, get a 10% discount on every purchase (beneficial for those who visit Starbucks approximately 16 times a month, our 4 times a week). As a student who must get by on little amounts of sleep, Starbucks is an almost daily destination for me (Did I mention I can’t resist their fat-free blueberry cake?).
The projected ways of cutting costs were a little outlandish though. One example: Cut down their recipes of banana bread, from 11 to one. They also plan on saving labor- which probably means longer waits for consumers as the cashier moves from the register to the espresso machine. Starbucks will also be partnering with the Subway chain, selling its Seattle’s Best Coffee brand at 1,900 locations.
Starbucks believes these presented tactics, among others, will save $400 million in costs by next fall. What do you think? Are consumers still in love with their $4.35 specialty drinks or has Folgers become increasingly more appealing to many of the once-avid Starbucks fans?
I must give Starbucks props on their new tactic of retaining customers though. Their new loyalty card. Customers who get this card, a free purchase but with an annual fee, get a 10% discount on every purchase (beneficial for those who visit Starbucks approximately 16 times a month, our 4 times a week). As a student who must get by on little amounts of sleep, Starbucks is an almost daily destination for me (Did I mention I can’t resist their fat-free blueberry cake?).
The projected ways of cutting costs were a little outlandish though. One example: Cut down their recipes of banana bread, from 11 to one. They also plan on saving labor- which probably means longer waits for consumers as the cashier moves from the register to the espresso machine. Starbucks will also be partnering with the Subway chain, selling its Seattle’s Best Coffee brand at 1,900 locations.
Starbucks believes these presented tactics, among others, will save $400 million in costs by next fall. What do you think? Are consumers still in love with their $4.35 specialty drinks or has Folgers become increasingly more appealing to many of the once-avid Starbucks fans?
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