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Marketplace Scratch Pad

Starbucks is punch-drunk

Scott Jagow May 7, 2009

Starbucks and McDonald’s are locked in hand-to-hand advertising combat, and Starbucks is getting pummeled. Apparently, the clown has one helluva right hook. Starbucks clawed back today with a full-page ad in today’s New York Times. After reading it, I’m pretty sure the ad people have had way too many carmel macchiatos.

It begins: BEWARE OF A CHEAPER CUP OF COFFEE. IT COMES WITH A PRICE.

The ad says… Starbucks is coffee. It’s not a hobby or potential new “revenue source.” Then, there’s this:

Those precious beans are then batch roasted, until they pop twice, to achieve the signature Starbucks flavor. Whether it be a single-origin coffee or complex blend, we repeat hundreds of roasts and samplings to discover the proper “roast curve” for each. Most other places outsource the roasting. And, find a proper roast curve? Please. They can’t be bothered.

Roast curve??? How many of the people who are bailing on Starbucks for McDonald’s because of the recession give two twits about a roast curve? I thought it might be a new baseball pitch or had something to do with Christmas dinner.

The hubris continues with a shot at Mickey-D’s employees:

(Starbucks baristas) are highly trained people, not counter help. If your drink isn’t the exact way you like it, they’ll make it again. Don’t ask those other guys to do that.

Yes, I have seen those signs at the McDonald’s cash registers. It’s right there in bold letters:
“DON’T ASK US TO DO THAT.”

But here’s my favorite part of the ad:

50% of all Starbucks beverages sold are under $3 and a good third are under $2. A small price to pay for that much soul.

Now I know what that burnt taste is. Soul.

Maybe Starbucks just doesn’t have enough grit and blue-collar to understand what it’s missing here. It doesn’t have to take all of the “soul” out of its coffee to connect with people.

It could start by lowering prices, which is what most companies do in a recession.

With its “50% of all beverages are under $3” approach, Starbucks profits are down 77%.

McDonald’s profits are up 4%. In this economy, that’s a take-down.

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