October 13, 2008

Starbucks Goes Discount

USA Today outlines Starbucks's latest attempt to boost sales is an unlikely route: price. As the article elucidates, the strategy is three-pronged:

1. Lower prices on holiday gifts (those CDs that were $14.95 last Christmas will be $12.95 this year)

2. Starbucks is selling gift cards at Costco -- more than one million cards have been sold at a 20% discount

3. On November 4, Starbucks is rolling out a gold card, offering 10% on everything in the store. "Gold card" conjures up notions of status and elitism, and yet it seems that the effect is no different from coupon clipping. The card will cost $25 for peons, but is being offered for free to the chain's best customers. Modesty prevents me from saying how much I'm paying.