By
Jackson Rohrbaugh
February 12, 2009
Starbucks’ new value-meal promotional strategy is a smart adjustment to rough times. Love it or hate it, fast-food pricing is a formidable tool to fight lagging sales and a loss of market share.
Starbucks announced Monday that it will be selling value meals in U.S. stores. These will be either cups of drip coffee paired with various breakfast sandwiches, or lattes paired with a choice of oatmeal or coffee cake. The pairings will be offered for $3.95, giving an average discount of $1.20 to consumers.
Is Starbucks trying to copy McDonald’s? One of the stated aims of Howard Schultz’s reinstatement as CEO last year was a return to the company’s original ethos: quality coffee in a unique atmosphere. Offering fast-food-style value meals and similar gimmicks doesn’t seem to make a more authentic and personal experience for the average consumer.
But is the person walking in the door of Starbucks expecting to be connected with in an intimate and personal way, or are they looking to I.V. drip their caffeine? McDonald’s has hurt Starbucks’ margins by luring away the caffeine zombies. The yellow-arched omnipresent drive-through chain is cheaper, less pretentious, and carries the same promise of instant caffeine. Plus, McDonald’s doesn’t charge for flavored syrups. The customer who wants a decaf, nonfat, sugar-free vanilla faux-coffee at Starbucks can get the same watered-down product at McDonald’s for 60 cents less. To boot, McDonald’s improved its drip beans, began filtering its coffee water, and now offers higher quality cream.
McDonalds’s profits exploded by 80 percent last year. They are taking advantage of the new consumer frugality in a way many restaurants just can’t keep up with. While everyone else is struggling to cut back and make a profit off regular prices, McDonald’s keeps introducing lower prices, cheaper food and healthier options. This is effectively crushing the competition, keeping McDonald’s at the top of the heap.
This is why Starbucks’ new plan is creative and promising for its sales. It is competing for the same parade of sleepy-eyed pilgrims in search of a breakfast Holy Land. It’s tempting to pine for the days when Starbucks was a corner café where every barista learned your name, but that’s unrealistic. We don’t ask the McDonald’s window girl to take our orders on roller skates, so we shouldn’t ask too much of our city’s coffee purveyors.
Starbucks has also introduced Clover Coffee at many locations this year. The Clover machine uses a vacuum press and a 70-micron filter to produce a unique cup of aromatic and nuanced coffee. I operate one at the restaurant I work at. It is turning single-origin coffee into an almost wine-like experience, a far cry from the acrid drip you sometimes encounter at Starbucks, or the freeze-dried swill McDonald’s once poured, and is frantically eschewing in favor of better brew.
Seattleites get the best of both worlds. We can go to one of hundreds of Starbucks if we’re feeling particularly cheap, or to McDonald’s if we’re frustrated and even cheaper. But because we’re always going to be at least a little rebellious, we’ll support the little guys too. I encourage you to give Stumptown, Zoka, Vivace, Vita, Uptown, Ladro and Umbria a chance. Our town thrives off of a diverse and multi-faceted coffee culture. But if our boutique coffee stores follow suit with the chains and start packaging muffins with coffee for promotional purposes, don’t call them sellouts. Just do what I do most days: make a French press at home, and pair it with chocolate-chip pancakes. It’s cheaper and tastier.
Reach columnist Jackson Rohrbaugh at opinion@dailyuw.com.
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