Starbucks is finally addressing one of its biggest customer problems, but experts warn that it’s unlikely to attract inactive customers on its own.
After largely avoiding discount offers for decades, the coffee chain now offers an increasing number of promotions and special offers.
Starbucks offered promotions for approximately half of the month of May, The Wall Street Journal reported, and began selling coffee and breakfast food packages starting at $5 this month for the first time in more than 10 years.
It’s good news for customers who have long complained about the chain’s rising prices, which can go up to $10 for a single iced coffee with added syrups and foams.
But retail experts warn that the company also faces other problems, with long wait times being one of the biggest problems among consumers.
After largely avoiding discount offers for decades, the coffee chain now offers an increasing number of promotions and special offers.
“Value for money has become a more important factor for many consumers, so Starbucks is right to try to offer more value,” Neil Saunders, CEO of GlobalData, told DailyMail.com.
‘However, the reason foot traffic has decreased in Starbucks stores is not simply due to high prices.
‘There are complaints about waiting times, the level of service and the atmosphere of cafes. For many, Starbucks feels a little less special than before.”
Lowering prices and offering deals does not solve these problems, he added.
“It’s basically an attempt to paper over the cracks.”
Starbucks had a disastrous start to the year, with tens of millions of customers heading to rivals or staying home.
The company reported a sales decline in May for the first time in almost three years.
Multiple factors were to blame, including a pro-Palestinian boycott of the company and rising inflation that prompted Americans to cut spending.
But the company’s general director especially highlighted the slowness of the service.
“Starbucks feels a little less special than before,” said Neil Saunders, CEO of GlobalData.
Laxman Narasimhan said that every day the company sees millions of examples of customers abandoning their orders because they took too long to place.
“Today we have customers coming into our stores, or paying for their orders by mobile phone, and not completing their transaction because of wait times,” Narasimhan said in an interview with CNBC’s Jim Cramer earlier this year.
“Our team in the US has done a phenomenal job improving speed of service, but we see more opportunity in doing so.”
Narasimhan also said the first quarter of the year was disappointing due to bad weather in the United States and slow demand in China, its second-largest market.
One in 12 customers now wait between 15 and 30 minutes for their drink, industry data figures from earlier this year show. Before the pandemic, almost no one expected so much.
During the first three months of this year, one in 50 orders took more than half an hour, according to research by Technomic.
And it’s not because staff are slow or lazy, but rather because bosses are cutting headcount in a bid to cut costs. At the same time, the company is also launching an increasingly complex drinks menu.
Starbucks told The Wall Street Journal it was rolling out promotions to ensure customers facing a challenging economic environment continue visiting its locations.
The company also said its pricing is on par with historical trends and consistent with others in the industry.
Executives have said in the past that their prices are necessary to help provide higher wages and training for baristas along with improvements in cafes.
The average price of a large brewed coffee earlier this year was $3.65, 49 percent above 2020 levels, according to Technomic.