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Starbucks to launch first nationwide discount program

Starbucks to launch first nationwide discount program

SEATTLE Looking to convince consumers that Starbucks is an affordable everyday option, the global coffeehouse chain Monday said it would launch March 3 a selection of “breakfast pairings” for under $4 that will be available all day.

The program marks the first time that Starbucks has offered a nationwide discount promotion and comes at a time when combination deals and value meals are proliferating as operators try to lure spending-shy consumers back in their doors.

Priced at $3.95, Starbucks’ pairings will combine a tall latte or tall brewed coffee with some of the chain’s best-selling breakfast items, such as oatmeal, which was added to the menu last year, or the reduced-fat cinnamon swirl coffeecake.

The campaign will also include the introduction of two new artisan sandwiches: bacon with a Parmesan egg frittata and gouda cheese; or ham with Parmesan egg frittata and a mild cheddar. Also available as part of the pairings will be a reduced-fat turkey-bacon breakfast sandwich, which is already on the menu.

“During these tough times, customers need to know they’re making a smart choice when they come to Starbucks,” said Michelle Gass, Starbucks executive vice president of marketing and category. “Our customers need to know that we are listening to them by making Starbucks an affordable everyday option.”

The move reflects a change in strategy for Starbucks’ chairman Howard Schultz, who has long resisted the call for value-positioned pricing, arguing that the chain’s coffees are “an affordable luxury.”

The new breakfast pairings also are a shot back at McDonald’s Corp., which is in the process of rolling out to its stores an espresso-based coffee platform whose items are priced on average 50 cents or more below Starbucks’ offerings.

Starbucks’ decision to offer its value-priced pairings follows dismal first-quarter results. Last month, Starbucks reported a nearly 70-percent decline in profit for the first quarter ended Dec. 28, largely because of declining traffic as consumers cut back on spending in this gloomy economy.

Starbucks officials at the time announced plans to add another 300 units to the previously announced list of more than 600 underperforming stores to close. The chain also will reduce its workforce by 700 non-store positions, in addition to the 6,000 jobs to be cut by the additional store closures, and the company backed off further on both domestic and international new store openings scheduled for this year.

In other news, Gerardo “Gerry” Lopez on Monday said he is stepping down as Starbucks Corp.’s executive vice president; president of the Global Consumer Products, Foodservice and Seattle’s Best coffee division, effective Feb. 20. He will be replaced by John Culver, senior vice president; president of Starbucks Coffee Asia Pacific, officials said.

Culver, who has worked for Starbucks since 2002, previously served as a leader of the foodservice division for five years. Starbucks’ chairman Schultz said Culver was responsible for building brand awareness in traditional foodservice venues for several brands within the chain’s portfolio. Prior to joining Starbucks, Culver was vice president of sales for Nestle USA.

Lopez said he was leaving the company for personal reasons.

Contact Lisa Jennings at [email protected].

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