Wednesday, August 30, 2006

Starbucks yanks free-coffee deal

A widely posted employee promotion becomes a little bit too successful for the coffee chain.

By MSN Money staff with wires

The free-coffee tap is getting turned off.

Starbucks announced on Tuesday that it was withdrawing an offer of free iced coffee to a limited number of employees and their friends and families in the southeastern United States.

In a statement, Starbucks said the offer "has been redistributed beyond the original intent and modified beyond Starbucks' control."

The company said an e-mail offering a free Starbucks iced coffee was sent to a limited group of employees in the southeast on August 23, with instructions to forward it to friends and family.

But apparently the promotional coupon, which was widely posted on the Web, was a little bit too successful: Starbucks said on Tuesday that, effective immediately, the offer would no longer be valid at any Starbucks locations.

In July, Starbucks posted its weakest monthly same-store sales increase since 2001, saying heavy demand for cold drinks like Frappuccinos slowed service during busy morning hours, prompting customers to go elsewhere for their daily jolt.

The ubiquitous coffee chain, which is facing stepped-up competition from rivals and slower sales growth at established stores, has been making an aggressive push this fall to remind consumers who is king when it comes to coffee.

The company earlier this week said that in addition to its usual array of seasonal drinks and coffee blends, it will be holding coffee tastings at its North American stores and will launch a series of podcasts about coffee on its Web site.The aim is to focus its marketing on what Starbucks says is the quality of its coffee -- something the chain said is key to set itself apart from anyone else hawking a cup of joe.

"We know that because of the level of care and passion we put into it that it translates to a better experience for our customers than our competitors can do," said Jim Alling, the head of Starbucks' flagship U.S. business.

In recent months, fast-food chain McDonald's Corp. has made a strong push to promote its new coffee blend and rival coffee shop chain Dunkin' Donuts has launched a new advertising campaign as it seeks to expand its business into the Starbucks-heavy Western United States.


  1. What the company should have done is to have PAID for thier own advertisement and coupon to be printed and distributed freely. Those that want it will take advantage of it, those that dont, wont.

    It is interesting to us here where I live, that within 12-18 months we have gone from 0-4 different starbucks within a 5 mile area. The newest one is in the new Harris Teeter in Burlington NC. One is in the new Target, another in that same shopping center, located independant of Target and the other is in an old Wachovia Bank in the out space of Burlington Square Mall. If there are more than four-then they have slipped my eye thus far..but 4? (and I dont even drink coffee!-but I love the hot chocolate and lemon cake) Muddy

  2. Starbucks' location strategy is bizarre. There are wide swaths of the country with no stores, but the towns that do have them seem to have too many. The number of locations around Burlington seems excessive.