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Starbucks Tries Out $1 Coffee

Java giant also trying free refills in Seattle experiment

By Nick McMaster,  Newser Staff

Posted Jan 23, 2008 2:50 PM CST

(Newser) – Starbucks is offering a low-cost option as it experiments with new approaches in the face of fresh competition from McDonald's, the Wall Street Journal reports. While Starbucks made its fortune on extravagantly named $4 offerings, an 8-ounce “short” cup is now available for $1 in the Seattle area, and the firm is also offering free refills on some brews.

The $1 option undercuts even the cheapest offerings of thrifty coffee vendors like Dunkin’ Donuts. Starbucks saw its first-ever decline in customer visits in the last quarter of 2007, which company executives attribute to excessive focus on adding stores to the detriment of innovation and the “Starbucks experience.” In response, founder Howard Schultz returned as CEO this month.

Starbucks Corp. chairman Howard Schultz pauses as he addresses the annual shareholders meeting, in this March 21, 2007 file photo, in Seattle. Starbucks on Monday, Jan. 7, 2008 fired Chief Executive Officer Jim Donald and gave the job back to Schultz. (AP Photo/Elaine Thompson, file)
Starbucks Corp. chairman Howard Schultz pauses as he addresses the annual shareholders meeting, in this March 21, 2007 file photo, in Seattle. Starbucks on Monday, Jan. 7, 2008 fired Chief Executive...   (Associated Press)
Howard Schultz, chairman of Starbucks Coffee Company, drinks a Starbucks' Ready-to-Drink Coffee at a launch event in Shanghai, China in this Nov. 1, 2007 file photo. Starbucks on Monday, Jan. 7, 2008 fired Chief Executive Officer Jim Donald and gave the job back to Schultz. (AP Photo/Eugene Hoshiko, file)
Howard Schultz, chairman of Starbucks Coffee Company, drinks a Starbucks' Ready-to-Drink Coffee at a launch event in Shanghai, China in this Nov. 1, 2007 file photo. Starbucks on Monday, Jan. 7, 2008...   (Associated Press)
Patrons sit inside a Starbucks in the New York neighborhood of Harlem on Monday Dec. 10, 2007. (AP Photo/Bebeto Matthews)
Patrons sit inside a Starbucks in the New York neighborhood of Harlem on Monday Dec. 10, 2007. (AP Photo/Bebeto Matthews)   (Associated Press)
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COMMENTS
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More on the competition between Starbucks and McDonalds
Economist

Starbucks goes back to basics with low-cost option
Guardian (UK)

 
Howard Schultz • Starbucks • McDonald's • coffee • Dunkin' Donuts • free refills

 
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