Starbucks Is Starting To Act Like There's Something Wrong With Its Expensive Coffee
Starbucks (SBUX) stock has slipped lately, and it’s looking for ways to perk up. It ran a promotion on LivingSocial this week, selling $10 gift cards for $5.
But the chain that pioneered a spendy coffee habit is acting like its product is too expensive, or something. This summer it agreed to sell discounted cups through Coinstar (CSTR) vending machines. It’s sending mobile deals to its best customers, as (see YCharts). And now Starbucks did a nationwide daily deal. Will consumers start to wonder how much it actually costs to produce that cup of coffee?
It needs to protect that margin because investors are paying a premium for Starbucks versus the cheaper swill over at Dunkin’ (DNKN).