So far, 2009 hasn't been any better for Starbucks than 2008, and the coffee giant continues to try and regain lost footing, hoping to make up for a 77 percent drop in profits last quarter. To promote value, Starbucks has announced plans to lower prices on basic drinks.
Beginning May 5, items such as the store's grande iced coffee will now retail for less than $2, giving some customers as much as 45 cents in savings. The catch? To make up for it, the coffee chain plans to increase prices on specialty drinks that are more complicated to make. Price adjustments are the latest development in a string of attempts to resuscitate sales this year. These offerings include promoting value pairings in store and tapping into the retail space with items such as instant coffee and premium ice cream. In recent weeks, Starbucks has also closed underperforming stores and announced plans to tap into the gluten-free market.
There's no question that many loyal Starbucks drinkers will be ecstatic about their morning drip getting cheaper — but I'm sure the opposite applies for steadfast specialty drinkers. What impact will this strategy have on your morning coffee break?