Ultimate Short Green Light: Starbucks to Test $1 Coffee w/free Refills

Discussion in 'Stocks' started by ByLoSellHi, Jan 23, 2008.

  1. [​IMG]


    Seattle Starbucks Tests $1 Coffee, Free Refills

    Published: January 23, 2008

    Filed at 1:03 p.m. ET

    LOS ANGELES (Reuters) -
    Starbucks Corp <SBUX.O> is testing $1 coffee and free refills in its Seattle outlets as the global gourmet coffee chain grapples with slower consumer spending and rising competition from fast-food rivals.

    Company shares were up at midday on the Nasdaq, rising 2.3 percent, or 43 cents, to $19.11.

    Starbucks is experimenting with a smaller, "short" $1 cup as well as free refills for brewed coffee. Starbucks charges around $1.50 to $4.00 for a coffee, depending on size and flavor.

    In a statement, Starbucks said, "This test is not indicative of any new business strategy."

    The company said testing is part of its ongoing business and that the company will not comment on specifics of its test campaigns until a final decision is made.

    Shares in Starbucks have lost around half their value over the past year amid worries about U.S. consumer spending, over-expansion and competition from fast-food rivals such as McDonald's Corp <MCD.N> that offer specialty coffees.

    Regular coffee prices at both McDonald's and Dunkin' Donuts, a unit of Dunkin' Brands Inc., start in the low $1 range.

    Starbucks announced a management reshuffle earlier this year, bringing Howard Schultz back into the chief executive position. It also said it would close underperforming U.S. outlets and speed up international growth.

    Starbucks has around 15,000 stores around the world including over 10,000 in the United States.

    (Reporting by Ritsuko Ando and Lisa Baertlein; Editing by Brian Moss)
  2. Have you read "Grande Expectations"? It was published recently, about the voyages of SBUX stock in a year.
  3. dsq


    i heard this yesterday on the news...doesnt this blow away their biz model:selling rip off coffee?Self cannabilization i guess...I dont think to many sbux investors will be happy with this new idea...
  4. They can blow it out their latte.

    After years of overcharging, they come begging?
  5. Stores in wealthier areas will establish trading kiosks in order to make up for the lost revenue.