In 2009, Starbucks decided on a path forward to better compete with the McDonalds Cafe Coffee offerings. They would lower the price on a basic cup of coffee, and make up for it by charging more for complex or premium drinks. The drinks that have anything extra such as a squirt of flavoring or an extra shot. It amounted to charging the loyal customers 8% to 15% more on their drinks so occasional visitors could be enticed with a cheaper cup of drip. No, I’m not just making this up… the NY Times did interviews and many Restaurant Blogs commented as well. Not outlined is the big price increase in extra shots.
Due to the ease of finding and directing others to the Starbucks locations, I use them daily for quick meetings. Paying Starbucks for a minimum of two cups of coffee a day.
Early in 2009, I paid $25 to Starbucks for a little black and ‘Gold’ card that allowed me to get 10% off my many drink purchases. It didn’t fully offset the price increase but it made the pain less noticeable. Right up to yesterday when the cashier let me know my card was no longer any good at Starbucks. They didn’t cut it up, but they did give me a little flyer outlining their new program. No email, no direct mail piece – Starbucks just decided the discount wouldn’t be honored to those who paid for the right. It would appear that Starbucks has taken a page from the Credit Card companies of late with their many ‘take them or you can leave’ changes.
The cashier was excited to let me know that they would now be giving out a free cup of coffee after a ‘few purchases’. It appeared to me that Starbucks wanted to keep the money in the bank by charging now and giving something away later. That was till I found out that the ‘free’ drink was after 30 coffee purchases.
Quick math shows that at 10% off, you getting 4 free drinks every 30 drink purchases.
With ‘Gold’ Card:
Average ‘complex’ drink $4.50 x 2 drinks a day x 5 days a week = $45 less 10% = $40.50
10 drinks a week for 3 weeks (30 drinks), out of pocket cash $121.50
Now with 1 drink free after 30:
Average ‘complex’ drink $4.50 x 2 drinks a day x 5 days a week = $45
10 drinks a week for 3 weeks (30 drinks), $135 then 1 free drink the next week -4.50. Out of pocket $130.50 if you accept the free drink isn’t actually in the 30 (effects the 31st drink)
Having tried coffees from many different sources. I do agree that the syrups are ‘better’ at a Starbucks. It is interesting that they only see McDonalds drip customers as important to win over. The smaller coffee houses have a chance to really strike and pull in customers to become ‘local loyal’ regulars.
