Filed under: Before the bell, Launches, Competitive strategy, Starbucks (SBUX)
Starbucks (NASDAQ: SBUX) recently began very wide distribution of Pike Place Roast. It tastes more like the coffee most people brew at home. It is inexpensive. It has drawn new customers to the coffee retailer.
And some people think it tastes like sewage.
According to The Wall Street Journal, “the new strategy, which played down the company’s more-established robust roasts, has touched off a debate about what customers think Starbucks should stand for: bold coffee for connoisseurs or a tamer brew for the masses?”
Starbucks founder Howard Schultz has been concerned about bringing the company back to it roots, the look and intimate feel of the company’s early stores, but the new drink seems to run counter to that.
The Pikes Place product says much about what’s wrong with Starbucks. Its appeal has been the originality of its products, but it needs coffee that will help its sales, which have been weak, grow again. Starbucks seems to be of two minds, which is never good for a company working on turning itself around.
With the economy in the dumps, what Starbucks does might not matter for now. Traffic is being injured by consumer spending. The shares in the company are way down. Pike Place is just another cup of coffee.
Douglas A. McIntyre is an editor at 247wallst.com.
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