Starbucks (SBUX) has seen a slow but steady decline in its stock this past year. The stock is down over 50% from its 52-week high and the company just closed 600 US stores.
However, Starbucks is tackling the tough times with its own recession special: the $2 iced grande beverage. Like Starbucks’ stock price, the drink is half off. Customers who made a purchase in the morning at SBUX simply have to bring their receipt back in the afternoon to get the discounted price. Starbucks management, needless to say, thinks it’s a fantastic idea:
“I think we’ve kind of hit the nail on the head,” said Brad Stevens, vice president of customer relationship management. “It’s easy for baristas to implement and it’s easy for customers to understand.”
Others, like Baird analyst David Tarantino, aren’t so sure:
“Certainly a discounting approach could lead to a better perception of value in the short run but the longer-term question remains – at the regular everyday price point, would the consumer still see Starbucks as offering the right value for them?” Tarantino asked. “That remains uncertain.”
The promotion runs until Sept. 2nd–at which point Starbucks will presumably have to evaluate whether consumers have sworn off $5 lattes forever.
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