Saturday, January 31, 2009

Is Starbucks Brewing Its Way into Extinction?


I don't often agree with things I see in the San Francisco Examiner, but one recent headline in the Ex's Business News section appeared to be right on: "Starbucks falsely blaming the economy for faltering sales." Exactly, I don't see that Starbucks' most loyal customers left the coffee chain... It actually appears that Starbucks is running away from its most loyal customers.

What did the old-time loyal customers want? Usually, one of two things. Either a strong, bold, cup of coffee or a good decaf coffee; with either being available at any hour of the day/night. What is the common factor here? The customer who wants one of these brews is either concerned about the effects of too much acid - and darker, bold, coffees have less acid than lighter ones - or the effects of caffeine. These customers were willing to pay a premium at Starbucks for one word: dependability. Sadly, this word is no longer applicable.

At most Starbucks locations, you cannot get a bold cup of coffee after the lunch hour begins, or after 2:00 p.m. And at the great majority of locations you can't assume you'll get a cup of decaf after noon. Oh, some 'bucks shops say you can request a decaf but you'll have to wait while its made. In other words, it has become a special order item and your order may or may not be honored.

What is Starbucks now offering instead? The Pike Place Roast (PPR), a coffee so weak and full of acid that the reader of a newspaper in the Northwest U.S. said, "(It) is so much like McDonald's coffee that if I want a cup, I'll go to McDonald's!" Yes, and save money in the process. (Difficult choice, huh?)

Starbucks was never going to prosper by going after the McDonald's-Wal Mart crowd and it is certainly not going to be a winning strategy now. I'll give Starbucks a bit of advice worth an extra bold cup of coffee: If you want those customers who are now heading to Peet's to come back, offer up at least two bold brews and a decaf option 24 hours a day. Simple.

If a customer actually wants a PPR, make them wait or - better yet - give them directions to the nearest McDonald's!

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