Quote:Extra 8/30/2006 11:04 AM ET
Starbucks yanks free-coffee deal
A widely posted employee promotion becomes a little bit too successful for the coffee chain.
By MSN Money staff with wires
The free-coffee tap is getting turned off.
Starbucks (SBUX, news, msgs) announced on Tuesday that it was withdrawing an offer of free iced coffee to a limited number of employees and their friends and families in the southeastern United States.
In a statement, Starbucks said the offer "has been redistributed beyond the original intent and modified beyond Starbucks' control."
The company said an e-mail offering a free Starbucks iced coffee was sent to a limited group of employees in the southeast on August 23, with instructions to forward it to friends and family.
But apparently the promotional coupon, which was widely posted on the Web, was a little bit too successful: Starbucks said on Tuesday that, effective immediately, the offer would no longer be valid at any Starbucks locations.
In July, Starbucks posted its weakest monthly same-store sales increase since 2001, saying heavy demand for cold drinks like Frappuccinos slowed service during busy morning hours, prompting customers to go elsewhere for their daily jolt.
The ubiquitous coffee chain, which is facing stepped-up competition from rivals and slower sales growth at established stores, has been making an aggressive push this fall to remind consumers who is king when it comes to coffee.
The company earlier this week said that in addition to its usual array of seasonal drinks and coffee blends, it will be holding coffee tastings at its North American stores and will launch a series of podcasts about coffee on its Web site.The aim is to focus its marketing on what Starbucks says is the quality of its coffee -- something the chain said is key to set itself apart from anyone else hawking a cup of joe.
"We know that because of the level of care and passion we put into it that it translates to a better experience for our customers than our competitors can do," said Jim Alling, the head of Starbucks' flagship U.S. business.
In recent months, fast-food chain McDonald's Corp. has made a strong push to promote its new coffee blend and rival coffee shop chain Dunkin' Donuts has launched a new advertising campaign as it seeks to expand its business into the Starbucks-heavy Western United States.
What do you think of this? Bad planning on Starbucks' part? Or did employees abuse the original intent of the promotion?