Starbucks is pulling back on its promotional offers in an effort to encourage customers to pay full price for its beverages. According to a report by The Wall Street Journal, confirmed by CNN, the coffee giant is scaling back its mobile app promotions as part of new CEO Brian Niccol’s strategy to reestablish Starbucks as a premium brand. This move also aims to ease the workload on employees, who face increased pressure during high-volume promotions.
In September, the company shifted its promotional strategy, offering extra loyalty points on Tuesdays and discounts on select drinks on Saturdays. This contrasts with the deeper discounts seen earlier in the year, such as “buy one, get one free” deals and 50% off offers.
Looking ahead, Starbucks plans to forego broad holiday promotions, instead focusing on promoting its seasonal beverages through advertising, the report noted. Historically, Starbucks avoided heavy coffee promotions but increased them earlier in 2023 to attract customers. Now, the company is reversing that approach under Niccol’s leadership, who took over in September. The change comes after Starbucks experienced two consecutive quarters of declining sales.
Analysts from Bank of America have highlighted a drop in visits from less frequent customers, particularly those who usually visit in the afternoons, as well as younger customers aged 18 to 29.
In a letter to employees and customers last month, Niccol expressed his intention to return Starbucks to its roots as a “community coffeehouse,” with an emphasis on comfortable seating, enhanced store design, and a clear distinction between “to-go” and “for-here” service. “There’s a shared sense that we have drifted from our core,” Niccol said, committing to improving the in-store experience and recapturing the essence of Starbucks as a social, sensory-driven space.
