24/7 Wall St. Insights
- The new Starbucks Corp. (NASDAQ: SBUX) promotion is complicated and confusing.
- Customers deserve better than that.
- Also: 2 Dividend Legends to Hold Forever.
Starbucks Corp. (NASDAQ: SBUX) offers a two-drinks-for-$10 and four-drinks-for-$20 promotion. The fine print is confusing—it even has an asterisk—but the rules to get the offer read like a lawyer has written them. The offer is good on certain days. It has to be a “medium-sized” drink. People get one coupon per membership—no canned beverages. There is no delivery. The offer is at participating stores.
Dear Mr. Brian Niccol (the new CEO, who has free plane rides to the headquarters), If you want people to come back to your too-busy, too-loud stores with slow service, let them have two drinks for the price of one—period.
Niccol may have been a good CEO at Chipotle Mexican Grill Inc. (NYSE: CMG). So far, he has issued a manifesto about running Starbucks stores and says he will travel to get to know the business better. He wants to bring Starbucks service back and treat customers better. The CEO before him, Laxman Narasimhan, traveled to stores and worked as a barista. See where it got him. He was fired after a short tenure.
Starbucks needs real benefits to attract customers. Many people who did not like the problem-plagued stores will not return. They have decided to visit local coffee shops or competitors like Dunkin’ Donuts and McDonald’s Corp. (NYSE: MCD).
To return to Starbucks, people need real incentives that do not have asterisks and lines of fine print. What happened to the CEO who built Chipotle?
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