Starbucks tries to roast its competition

Lisa Napoli Mar 19, 2008


Doug Krizner: Here in the States, Starbucks holds its annual shareholders meeting today. It’s the first since CEO Howard Schultz returned to the job in January after a seven-year hiatus. The issue on the front burner: boosting sales at the company’s 16,000 stores. Marketplace’s Lisa Napoli has a preview.

Lisa Napoli: Since fast food joints got into the game of premium coffee, there’s been trouble in the land of lattes.

Tom Pirko: When McDonald’s and Dunkin Donuts become yours competitors, and it brings you down to more into the commercial world — and their price really matters.

Beverage analyst Tom Pirko says that’s muddied Starbucks sales. Growth at the company has slowed to its worst pace in two years.

Pirko: You’re charging someone four or five bucks for a coffee drink, it suddenly dawns on you that you’re going to have fewer customers, because people can’t afford to drive around quite as often, they don’t have as much disposable income.

Which is why some analysts say today, you might see Starbucks roll out a price reduction — and a new buck a cup drip coffee.

Another perk? A frequent latte card, where you get freebies after buying a certain number of drinks. Already Starbucks is giving away free Internet access to loyal fiends of caffeine.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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