Starbucks: Bracing for the Down Economy

by erica ~ May 15, 2008

The weakening economy has some major retailers ducking for cover.  With the summer approaching and the cost of commodities like dairy and coffee beans soaring, Starbucks has been hit hard.  While they have already been experiencing a paralleled downturn in recent years, they announced this week that they are firing back with even more innovations that will entice consumers during these stressful times. 

Here are some of the changes they are planning in the coming months from this article in Brandweek:

- In New York City - which recently enacted the law that all chain restaurants must post the calorie content of the food they offer - I was suprised to see that almost everything in the glass food case is more than 400 calories.  With the focus on health becoming quite popular nationwide, but especially in New York where the calorie counts are quite literally in your face at the store, Starbucks will be introducing new items, such as smoothies and breakfast items for the health conscious.  Expected to debut this summer are fruit smoothies in two flavors, a frozen fruit low-calorie drink and a variety of other low-calorie breakfast items.

- Another addition to the Starbucks menu will be an energy drink, which will be distributed by the company’s partner, PepsiCo.  Starbucks hopes that more exposure of this partnership will raise consumer awareness of their brand.

Lastly, Starbucks will concentrate on opening 1,000 more stores in 2008 and 2009.  These stores, as well as the existing ones, will soon be facing another rejuvenation to create a more “luxurious” experience.  Hallelujah - they’re improving the couches, music, smells and the knicknacks they sell. 

Though many retailers are facing a harsh consumer environment, providing a newer and more exciting experience will encourage consumers to continue visiting and purchasing items.  Good luck to Starbucks - I hope these tactics work for them.