1. Channel: Restaurants

Is Starbucks Diluting Its Value Proposition?

CBS News reports that Starbucks has announced that it is now going to charge patrons a buck for one special request that used to be free.

According to the story, “The coffee chain will charge customers a dollar extra to get their Refresher beverages made without water, angering some brand loyalists. Starbucks said the charge is necessary because the juice drinks are more expensive to make when they’re not diluted … Refreshers are cold beverages consisting of flavored juices, freeze-dried fruit chunks, water, various milk choices and lemonade, according to the chain’s website. Fans of the drinks took to social media to express their disappointment.”

“There will be an additional cost of $1 for Starbucks Refreshers Beverages customized with no water, as this customization requires extra ingredients,” the company said in a statement. 

However, CBS News notes that at some stores, customers also are being charged an extra dollar if they order refreshers “with light ice,” which is not mentioned in the new corporate policy.

KC’s View:

I didn’t have to take to social media to tap into the outrage over this new policy.  We had plenty of it in my own family, where my daughter traditionally has ordered a “venti strawberry acai refresher with no ice, no strawberries and no water.”  (I don’t know how she drinks the stuff, but that’s what she likes.)  What she would do is bring the drink home and then split it into two, adding her own preferred amount of water and ice, and giving one of them to Mrs. Content Guy.

Now, one could argue that in some ways she was gaming the system – but it was Starbucks that set up the system and made the rules.  And it was our local baristas who encouraged her to order the drink without water, ice and strawberries, because they saw how often she was placing the same order.  They tried to save her some money.

Now, the company is changing the rules.  And instead of being an advocate for the shopper, Starbucks has decided it is better off being an advocate for its own bottom line.

I asked my daughter about the change, and she pointed out that Starbucks says that a) it is extra work to make a drink without water and ice, and b) there are extra ingredients.  Both statements are false, she pointed out – it is actually easier to make it without ice, water and strawberries, and she’s taking ingredients out, not putting more in.  (I would point out that we’ve asked if we can just buy the refresher mix that they use as a base for the drinks, but have been told no.)

It also has been pointed out to me by the women in my family that Starbucks already has raised prices this year, and this strikes them as just another price increase that has less to do with inflation and more to do with greed.  “It’s a money grab,” is the exact quote.

Now, let me be clear.  These all are first world problems.  But I have to wonder if Starbucks calculated the money it would make by charging an extra buck vs. the grief it would get from customers and the potential loss of sales.  Already, the women in my house are exploring options – our Starbucks actually is kind of crappy, and they’re going to see if the two or three other cafes a stone’s throw away have similar offerings.

Here’s the thing.  The real mistake that Starbucks is making is abandoning its role as advocate for patrons.  Maybe that is good for the annual report in the short term, but if this is a measure of how the new CEO – what the hell is his name again? – is going to set priorities, then the company may be in for nine miles of bad road.

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