The coffee giant is joining the bandwagon of several other fast-food chains trying to lure in customers with deals by announcing a new “pairings menu,” which gives diners the ability to pair a tall hot or iced tea or coffee with some of the coffee bar’s staple bites, like a butter croissant or breakfast sandwich, for just $5 to $6. Starbucks says the deal is available for a limited time.
The new deal is one of many made by fast-food chains being squeezed by higher food costs and inflation, which have, in turn, been squeezing consumers’ wallets. This comes after Starbucks reported a “disappointing” second quarter, in the words of the company’s own CEO Laxman Narasimhan, and the latest of many quarters with missed results. In its most recent earnings report, the chain said it’s been struggling to meet consumer demand in the U.S. and China, while financial impacts from boycotts (particularly in the Middle East), barista unionizations, and even a pointed callout from its former CEO also weighed down the chain.
The chain’s net revenue was down 2% to $8.6 billion, and global comparable store sales declined by 4%. Sales in North America, one of the coffee chain’s largest markets, dropped by 3%, according to the report.
In the earnings call, Narasimhan said this quarter’s results “do not reflect the power of our brand,” and is rather a result of a “highly challenged and complex operating environment.”
While bundling is a long-time practice for several fast-food chains—think burger, fries, and drink combos offered at McDonald’s and Wendy’s—the deal is somewhat of a rare move for Starbucks, which instead often focuses on the quality and scope of its product lines, with new drinks featured almost every season, as a marketing strategy.
Indeed, each time the weather shifts, so do the colors and flavors of the coffee bar’s menu. In January, Starbucks released its ‘Oleato,’ an olive-oil infused coffee with a Mediterranean influence; in March, the coffee maker added the floral flavors of lavender for lattes on the menu; and in April, turned to chilis to offer spicy cold foams and lemonades. This summer, Starbucks has also added a new summer drink, with raspberry pearls and a coconut milk base, inspired by bubble tea.
While Starbucks is, like many fast-food chains, facing elevated inflation and higher food costs, it’s clearly experimenting with a similar strategy recently employed by McDonald’s, Wendy’s, and Burger King, which have re-introduced $5 value deals or other low-cost bargains to get customers back into stores. In May, McDonald’s promised to launch a $5 meal deal as a four-week promotional campaign. Shortly after, Wendy’s announced a $3 breakfast rival deal, and at the end of May, Burger King followed suit, saying it is preparing its own $5 bargain deal.
Starbucks’ newest pairing menu is a limited-time offer that’s only available in stores and is not eligible for delivery services. Customers wanting to customize their drinks or food will need to pay more.
