CHRON.COM: "Starbucks offers afternoon drink deal nationwide "

By LAUREN SHEPHERD AP Business Writer © 2008 The Associated Press

Aug. 4, 2008, 11:23PM

NEW YORK — Looking to bring more value-seeking consumers through its doors for a late afternoon caffeine fix, Starbucks Corp. said it will now offer its morning customers any iced grande beverage for $2 after 2 p.m.

The price is a big cut from the normal price of most grande-sized iced drinks. A grande iced latte, for example, costs about $4. To get the discount, customers must present a receipt from their morning Starbucks visit.

MY TAKE:

Traffic has been declining at Starbucks. Even if customers keep dollar ring size the same, any reduction in transactions will reduce store revenue. It is interesting that Starbucks is taking action to entice morning customers to visit in the afternoon. Nice way to get folks who may have curtailed their second visits to come again in the same day. The discounted price will allow people to justify a second trip.

For Starbucks one of the key strategies that will go along with this is selling more items per ring for these customers. Margins are being reduced to entice people into traffic building visits. Once you get them in the door... sell, sell, sell! Be nice about it. The success of the enterprise depends on increasing the cash flow and profits from every store, every hour and every opportunity.

For more on this story you may want to check out the Starbucks Gossip blog.

If you are one of the customers taking advantage of this promotion...

• How was your experience?
• Did they push other items during your visit [cookies etc]?