As many fast food chains such as Dunkin’, McDonald’s and Wendy’s rely on value meals to attract inflation-weary consumers, Starbucks appears to be going a different direction.
The Wall Street Journal reported that Starbucks is planning on cutting back promotions as the company’s new CEO plans on emphasizing the company’s image of selling a premium product. In August, Starbucks named Brian Niccol the company’s new CEO after he headed Chipotle. Starbucks noted that Chipotle’s stock value increased by 800% during his tenure.
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“I have long-admired Starbucks iconic brand, unique culture and commitment to enhancing human connections around the globe,” Niccol said when he was hired in august. “As I embark upon this journey, I am energized by the tremendous potential to drive growth and further enhance the Starbucks experience for our customers and partners, while staying true to our mission and values.”
The Wall Street Journal said that Starbucks does not plan to run broad offers during the holiday season. It will instead use advertising to promote seasonal drinks, the outlet reported.
Starbucks confirmed the Wall Street Journal's report was accurate, but would not provide additional details.
The report comes as drive thrus are responding to years of increasing costs. According to Finance Buzz, fast food restaurants have increased prices between 39 to 100 percent over the last decade. In the same time, overall inflation has gone up 31%.
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Although Starbucks prices have gone up at a rate higher than inflation more broadly, Finance Buzz says that its price increases were not as high as competitors. The report says that Starbucks increased its prices by 39% between 2014 and 2024, which was the tied for the lowest price increase among America’s 10 largest drive thru chains.
McDonald's has had the largest price increases in the last 10 years, the report says. In response, franchisees have embraced a $5 value meal that includes a sandwich, nuggets, fries and a drink. The company has said the value meals have helped bolster foot traffic since the summer.
