Starbucks has recently made headlines for reducing its discount offerings, a move aimed at positioning the brand as a “premium” player in the market. According to a report by The Wall Street Journal, changes to the Starbucks app will limit the discounts available to customers, making it harder for them to enjoy their favorite beverages at a lower price.
Many customers, particularly within the Asian American community, have noted that Starbucks has been gradually increasing the prices of certain drinks over the years. With the latest reduction in discounts, some patrons are worried that accessing Starbucks will become more challenging in the future.
The Wall Street Journal reported that Starbucks will be scaling back the promotional discounts on its app, which typically offer various incentives when purchasing coffee or tea. CNN has confirmed this development, attributing the initiative to the newly appointed CEO Brian Niccol. He aims to evolve Starbucks into a high-end coffee brand while also reducing the workload on employees, particularly on days when discounts are significant.
Historically, ordering through the Starbucks app provided customers with multiple discounts. According to ABC 7 News, Starbucks’ key promotions included bonus points on Tuesday coffee purchases and discounts on selected drinks on Saturdays. Previously, customers enjoyed more generous deals such as “buy one, get one free” or “half off the second drink.” The Wall Street Journal indicates that such promotions are unlikely to return, even during the upcoming holiday season, as the company intends to focus on new product advertisements instead.
In fact, while Starbucks discounts have been sparse over the past few years, they were more prevalent in the first half of this year. The “buy one, get one free” offers aimed to win back customers who had strayed, yet this strategy did not seem to boost sales. With Niccol’s new leadership, Starbucks is reverting to its previous policies, eliminating major promotional discounts. Reports show that Starbucks has experienced two consecutive quarters of disappointing sales. A July CNN report highlighted a roughly 6% decline in sales at established locations within the North American market, attributing the downturn to consumers struggling to afford an average coffee price of around $6.
In Southern California’s San Gabriel Valley, frequent Starbucks customers have observed the price increases in recent years. For example, the seasonal favorite Pumpkin Spice Latte has risen from about $5.50 a few years ago to over $6 today. One customer mentioned that with the removal of larger discounts, she may have to reduce her visits to Starbucks.
Money reported that the price of the Pumpkin Spice Latte in 2024 has more than doubled since its introduction. When the drink first launched in 2005, the grande size was approximately $3.35; it now averages $6.50, with prices potentially higher in some areas.
A Bank of America analysis last week noted that Starbucks is losing customers primarily among “occasional afternoon visitors” and “young adults aged 18 to 29.”
Niccol’s vision for Starbucks is to shift the focus back to being a “coffeehouse” rather than primarily an online ordering service. In a letter to employees, he expressed his desire to return Starbucks to its original mission of being a community coffee shop, enhancing the store’s interior to clearly differentiate between on-site consumption and takeout.
