Perk up: Starbucks woos inflation-weary customers with major deals for the first time in years
In an attempt to rebuild slumping customer numbers Starbucks is now offering a selection of special deals – a promotion the popular coffee chain has avoided for decades.
The Seattle-based operator is currently offering several promotions, including discounts, buy-one-get-one-free deals and supersize perks for loyalty customers.
Starbucks has long marketed itself as a premium coffee chain, though its prices tend to be on the high side, something that has not been helped by surging inflation in the US – resulting in more Americans opting to eat at home or ditch special treats.
A grande Caramel Frappuccino is typically listed at around $5.65 on the chain’s menu, though a single iced coffee with extra syrups and foams can cost around $10 at full price.
The average price for a grande brewed coffee earlier this year was $3.65 – 49 percent above 2020 levels, according to the market-research firm Technomic, which tracks prices at the chain.
Gradual yet noticeable price increases have led customers, from teenagers to city workers to suburban moms, to rethink their need to buy a morning pick-me-up.
According to Starbucks, its traffic dropped 7 percent in the three months ended March 31 from the prior year, the biggest quarterly decline since at least 2010. Its active loyalty-rewards users decreased by 1.5 million between December 31 and March 31.
Earlier this month, for the first time in more than a decade, the chain began offering bundles of coffee and breakfast food starting at $5. “50% off a drink. It’s on,” Starbucks said in a recent email to customers. “Keep checking the app all summer for more deals heading your way.”
The coffee giant is not the only fast-food chain to introduce enticing new deals in order to retain their customer base.
From Tuesday McDonald’s is set to offer a meal-deal for roughly a month, with rival Burger King also bringing back its own $5 bundle earlier this month. Wendy’s recently announced its own $3 breakfast meal deal.
Starbucks is rolling out the promotions to ensure that consumers who are facing a challenging economic environment continue to visit its cafes, a company spokesman said, according to The Wall Street Journal.
The chain previously ran a “Happy Hour” deal roughly once a year in May, which started in 2010 and was limited to Frappuccinos. The deal was expanded in 2018 to espresso, ice tea and other beverages to boost loyalty program participation.
The promotion ended in 2020 after the Covid-19 pandemic due to crowding concerns in cafes.
According to Starbucks’ Chief Financial Officer, Rachel Ruggeri, the new deals are designed to improve its standing among more-occasional patrons.
“We’re seeing progress so far, but we’ve got a ways to go,” Ruggeri said, during an investor presentation earlier this month.
