HOME > Chowhound > Chains >

Discussion

Starbucks fights back with a $1 cuppa

Starbucks just won round three from McDonalds by landing a right uppercut on McD's jaw with a $1 cup of coffee, undercutting McD's price.

http://www.reuters.com/article/rbssCo...

  1. Click to Upload a photo (10 MB limit)
Delete
  1. Yea, but do you have to ask for a corto?

    1 Reply
    1. But you can still go to a Nordstrom Cafe and get a coffee for only a quarter still and I believe it is still made by Starbuck's, but is the Nordstrom Blend, which I much prefer over Starbuck's house blend.

      5 Replies
      1. re: justagthing

        Yeah, but when I get anywhere near a Nordstrom, that 25 cent cup of coffee is somehow, some way, going to mysteriously turn into a $100 pair of shoes. They REALLY should do something about that. :-)

        1. re: Suzy Q

          That or a $300 handbag. Oh and btw...the food in the cafe is not so bad either. I like many of their salads. Nice pick me up for after you spend what you should have used to pay your rent/mortgage.

          1. re: justagthing

            and depending on where you live, don't forget the parking fees..or the ticket if you park on the street & lose track of time.

            btw, i'm impressed that you guys can get away with spending just $100 on shoes or $300 on a bag. i have ridiculously expensive taste...AND the inability to buy just one pair - or bag - at a time.

            have any of you ever tried the pound cakes they sell in the nordstrom cafes? i know the woman who makes them, but i've never been able to try them myself because of the gluten issue. i'd be curious to hear reviews from some hounds. [feel free to be honest, i don't know her that well, and i promise i won't tell ;)]

            1. re: goodhealthgourmet

              I have tried some of the flavors/varieties. The one I remember best is seasonal, pumpkin. It was very tasty w/lots of pumpkin flavor. I hate when a pound cake is flavorless. Does she bake for ALL of the cafe's? I figured they did regional buying in regards to fresh baked goods?

              1. re: justagthing

                i'm pretty sure she supplies all the cafes in the western region, and she just struck a deal with a huge bakery to increase her production, so i think they'll be going national with her cakes. she's supposed to be on oprah as well once the new bakery & her website are ready to handle increased demand, so i figured the cakes had to be pretty damn good!

      2. Once you start selling on price, you get stuck selling on price. So much for "image". Starbucks had a nice run and did much for the coffee world, but it looks to be winding down.

        4 Replies
        1. re: Panini Guy

          It's just a cup of coffee, and agree, Starbuck$ turned it from a commodity to a boutique item, and plenty of suckers swallowed it, but in the end, it's just a cup of coffee, and not a very good one either.

          Updated: The Mrs. informs me Starbuck$ is selling ersatz bagels for $3.00 a pop. There is a sucker born every minute.

          1. re: ChinoWayne

            What the heck is an ersatz bagel?

            Jfood ordered a butter bagel once at SB. They handed him an uncut bagel, a napkin, a plastic knife and some LOL butter tabs. After jfood stopped laughing he told La Barista "No Thanks".

            Jfood still orders a "Large Coffee" when he travels and needs a cup of Joe and 20% of the time La Barista does not understand the order (OMG). Jfood refuses to use the ventee/biggee/coffee lingo. This old dog will not be dragged into the 21st century on his cup of coffee order.

            1. re: jfood

              Jfood, I had the same question re: the bagel!

              I've never used the grande/venti/whatever monikers before, and they generally seem to figure out what I want. I just feel too stupid saying that I want a "venti" this or "grande" that. Gimme S M and L, people!

          2. re: Panini Guy

            I thought the same thing at first, but as I think more about it, it makes a lot of sense. They sell the smaller size for a bit less. Coupled with their advertising campaign about the 90 calorie tall skinny latte, they might be able to get more people in the door because there are, in fact, smaller and less expensive and less caloric options. Of course, once you get people in the door, the larger and more expensive items are likely to look attractive to a great many of them. I don't think their milk drinks are going to be sold on price any time soon, but then I'm wrong a lot.

          3. this is wierd because the "short" was one of the originals, plus it's always been an off menu option, at least as recently as a couple years ago.

            2 Replies
            1. re: kindofabigdeal

              Yep. It's what they use for their kid-sized cider and hot chocolate -- I always get the short size because . . . being short and small, I can't finish anything bigger!

              1. re: kindofabigdeal

                You can always order a short. They just don't bother to tell you!

              2. I'm so glad an independently owned (Cuban) coffee house opened up near my home. I don't have to bother with Starsuck$ anymore. Not only are the coffee offerings superior to Starsuck$ they're a little bit cheaper and much more authentic. As far as Starsuck$ $1 'cuppa'...well that's just a 'hook' as far as I'm concerned. They'll probably start jacking up the price of (an)other item(s) to make up for it.

                1. Yeah, this isn't that big a change: the short brewed coffee at the Starbucks nearest me has always been about a buck forty-five. This is not anything new and earthshattering.

                  1 Reply
                  1. re: BarmyFotheringayPhipps

                    They are also talking about free refills, a la McD's.

                  2. It is only in a test market in Seattle for now. You can, as always order a short anything in Starbucks. A short coffee isn't much more than a dollar anywhere (prices vary slightly by market).

                      1. I read they are getting rid of their breakfast sandwich line (which I liked on the weekends). Customers complained the stores smelled like food, not coffee. ?? I read this in the paper.

                        3 Replies
                        1. re: stellamystar

                          If they don't change their policies of the last few years, there will be a simple fix. They will start selling something wrapped in plastic and served cold. Just like their great sounding, blah tasting, and grossly overpriced sandwiches. The automatic espresso machines and sealed bean bags of unknown age
                          eliminated any smell of coffee from their stores.

                          Does anyone think they will come to their senses and restore the ambiance?

                          1. re: embee

                            That's a hard question, because what does it mean to come to one's senses? (was the play on words intended?) I seriously doubt that the ambiance is what makes them money. On the other hand, the recent events seem to suggest that they are trying to restore it... or at least have the impression that they are trying to restore it. Here's my "best of both worlds" plan. The drive through makes the money, so as you order a little tube sticks into your car and injects a freshly ground coffee aroma. As you pull around the building, three people hop in your car. Two of them argue about who could beat up whom, Ralph Nader or Ron Paul. The other sits quietly in the corner scribbling in a notebook, occasionally taking a chance to look around inquisitively. They hop out, you drive on with coffee AND ambiance.

                            1. re: kindofabigdeal

                              Be sure that idea gets to Schultz....

                        2. Does it still taste like burnt bongwater? I'll keep my $1.

                          Starbucks is also closing 7,100 stores and closing for 3 hours for "refresher" training on how to make and serve coffee. I hope that training includes how to rearrange deck chairs on the Titanic.

                          13 Replies
                          1. re: monkeyrotica

                            This video should be required viewing by all current $tarsuck$ employees as well as new hires . This is the real deal. My BH now working in an independently owned coffehouse had to watch this video as well as two others provided by the owners.

                            http://espresso101.com/books_dvds/cof...

                            1. re: monkeyrotica

                              They're closing 7100 stores? That would be not quite half of all their stores world wide.

                              In fact, they're closing about 100 stores while opening about 1200 other stores in the US. So they're slowing the rate of their expansion.

                              I had no idea that burnt bongwater tasted so good.

                              1. re: ccbweb

                                Starbucks to close stores (From the New Mexico Business Weekly)

                                http://www.bizjournals.com/albuquerqu...

                                1. re: crt

                                  "Starbucks Corp. said it will close down 100 stores and slow down its opening of new U.S. stores from 1,600 to 1,175 this year."

                                  Sounds about right.

                                  And the $1 cup of coffee at Starbucks? Looks like a winner with a new demographic, at least in my personal universe. My mother and her friends have now moved their weekly get-togethers to Starbucks, in no small part because they can now pay about the same as at Mickey D's, but relax in the much nicer Starbucks environment. They're very excited and the local Bucks staff have welcomed them with open arms.

                                  And incidentally, they tried two independent coffee houses, and left one because of the high prices and the other because of the terrible snottiness of the staff. If the folks at Starbucks are nice to my mama, well hey, I can't hate them too much. :-)

                                  1. re: Suzy Q

                                    My understanding is that when a premium brand starts "downscaling" and serving a less-expensive product, this eats into sales of the premium branded product. In this case, they might get more people to buy the $1 product, but those who bought the $5 product will start buying the cheaper item. It's called brand dilution. A similar thing happened when Disney started cranking out sequels to classic movies (Cinderella III?)

                                    1. re: monkeyrotica

                                      Interesting theory, but just not the case with Starbucks.
                                      The original founder has come back as CEO and is returning the chain to the basics that made them as wildly popular as they are today. So far, I agree with all the changes he has made amd see them as positive, for the employees and the customers.

                                      1. re: momof3

                                        Just because Schultz is back doesn't mean everything will go smoothly. They've already made a huge mistake in coming down to McDonald's level - a hard one to rebound from. How did drive-thrus support/enhance the "Starbucks experience"? They didn't - actions like that simply help speed the commodization of brand.

                                        They stopped hiring actual baristas ages ago in favor of PBTCs and pushbuttons. Part of the "old" Starbucks experience was the magic of having someone who half knew what they were doing behind a LaMarzocco steaming beast, something that's rare to find these days at SBUX. You can't "create" a trained barista with only the three hours of training upgrade they're doing in a couple of weeks.

                                        There's a whole lot of work to do and yet they're still focused on music, canned drinks and vending machines instead of the in-store experience. Schultz alone can't fix that immediately, especially when investors are screaming about losing half the stock's value - they'll put pressure on profits and short term "fixes" that will ultimately degrade the brand further, IMO.

                                        We're very lucky in Pittsburgh to have a number of exceptional indie shops (a lot of stinkers too, but easy to avoid those). It's actually getting sort of like Portland-ish around here coffee-wise.

                                        1. re: Panini Guy

                                          What's interesting is that the relevant competition for Starbucks is now McDonald's. Micky D's has every advantage in terms of real estate, marketing expertise, operational efficiency...but if Starbucks does try to beat McDonald's at its own game, Starbucks will not win. Witness the death of the Starbuck's hot breakfast...the confusion/angst surrounding the drive-throughs...there will probably always be segments that prefer Starbucks, but McDonalds is going to win any sort of large-scale, national/international competition.

                                          1. re: dcandohio

                                            We don't have the Mickey D coffee program in Toronto as of now. But we had an interesting experience in rural England a couple of years ago. The coffee served everywhere was execrable. Much of it was instant, and the brewed coffee and espresso, where available, were often worse.

                                            There was a Mickey D's marooned in the middle of a motorway interchange. We stopped in when we were getting some gas. The place smelled of coffee (not of hamburger grease), and the coffee smalled good. It was.

                                            The brewed coffee and the cappuccino (made with a real espresso machine) were really good. Not the best we've ever had, for sure, but absolutely fine. For the remainder of our holiday, we risked our lives several times a day. We had to walk across a roundabout on a main highway, and two motorway access ramps, to have our coffee at McDonald's. It was worth the effort.

                                      2. re: monkeyrotica

                                        Nah, i disagree; they've always offered a $1.35-$1.60 small cup of drip coffee, which is always priced much lower than their espresso-based drinks. Dropping it to $1 (which is still extremely profitable on a marginal basis) is really nice psychologically, and good press, but it's unlikely to encourage anyone to switch from a latte who wouldn't have switched anyway ($3.10 to $1.45 vs $3.10 to $1.00).

                                        Also, btw, your model didn't apply to luxury fashion (couture), which has done much much much better in the last few decades by introducing more mass-market products. If it's done right, it could actually improve sales of the high end products by building brand.

                                        1. re: xanadude

                                          I agree. They are different products. It's like saying that McDonalds making their fountain drinks cheaper would make people convert from shakes. Starbucks could give away their drip coffee and still make profits, because hot-milk drinks (not just espresso based) and frappuccinos make up the bulk of their profit.

                                          Personally I'd be much more likely to go to starbucks often if there was a $1 cup of coffee. I always need a place to study. This brings Starbucks back to one of their core missions, which is to establish a "third" place, after work and home. Also, if I spent just $1 on coffee, I could see myself getting a pastry more often (some of which are good, though many aren't).

                                          Another thing they're trying out is free wifi for two hours if you use their card (I think they're referring to the starbucks card, but I'm not sure).

                                      3. re: Suzy Q

                                        "And incidentally, they tried two independent coffee houses, and left one because of the high prices and the other because of the terrible snottiness of the staff. If the folks at Starbucks are nice to my mama, well hey, I can't hate them too much. :-)"

                                        Her bad luck with the independents I guess. I've had snotty, complacent, and seemingly 'could care less' employees at some Starbuck's I've visited. And conversely, I've had friendly courteous and helpful staff at independent coffee houses.

                                        1. re: crt

                                          I'm sure that's very true, crt - just not in this particular case.

                                2. The coffee may only cost $1, but I'm sick of paying the $5 in attitude to the "baristas". We have two coffee chains in Canada, Timothy's and Second Cup, and each of them has managed to serve me decent coffee without sneering "vente or grande" when I ask for a "large".

                                  1. FREE THE BEST PRICE

                                    You get a complimentary coffee at my public credit union in Toronto as a member.
                                    It's Van Hautte an excellent European brand. Very popular in Montreal.

                                     
                                    2 Replies
                                    1. re: fruglescot

                                      that's a little bit out of the way for me

                                      1. re: kindofabigdeal

                                        DEEP IN THE HEART OF TEXAS
                                        I'll enquire about opening a branch down there in Texas.. Can you get Van Hautte coffee there?