In March, Starbucks CEO Howard Schultz will wipe the flop sweat off his brow and try to forestall doom by jumping on the value-meal bandwagon. He's is also firing back at a billboard put up by McDonald's in Seattle which reads, "Four bucks is dumb," referring to Starbucks's reputation as the home of the $4 cup of coffee. Baristas will now be doing double duty as brewers of corporate propaganda, instructed to inform customers that the average price of a Starbucks beverage is less than $3, and that 90% of Starbucks drinks cost under $4.
"There have been others that have been propagating the myth of the $4 latte, and that is not true," Starbucks marketing exec Michelle Gass tells the Wall Street Journal, adding that the average price of a Starbucks latte is $3.25. "We have got to correct the misperceptions that are out there." Thing is, the reporter whose perceptions she tried to correct knows full well that the cost of a 16 oz. latte in New York is actually $4.06, including tax.
But it is true that some sizes and varieties of Starbucks are actually cheaper than Dunkin' Donuts coffee, once size differences are factored in. And the gap between Starbucks prices and that of its competitors, including McDonald's, has narrowed since 2007, when the retailer's death spiral began. With profits continuing to drop—sales fell 10 percent overall at Starbucks nationwide—Schultz is banking on the value meals, which will include a tall brewed coffee with a breakfast sandwich for $3.95. The AP has more on the upcoming discounts.
