With Traffic Down, Starbucks Launching TV Campaign
Seattle Post Intelligencer, Friday, November 16, 2007 12 PM
Starbucks, which has previously expressed disdain for promoting its gourmet drinks on television, is launching its first-ever TV campaign today that is "so holiday that it will blow you away," says CEO Jim Donald. The Seattle-based coffee chain also says that the number of visits to its established U.S. stores fell for the first time--by 1%--although profits were up by 35% in the fourth-quarter compared with a year ago. Same-store sales rose 4%.
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The traffic dropoff came after a price increase in July. Starbucks says that it will slightly rein in the number of store openings in the current fiscal year because of the soft economy. The company also says its field managers will spend more time in stores, that it will provide additional training to baristas, and that it is offering consumers customized Starbucks cards through its Web site.
Without mentioning rivals McDonald's and Dunkin' Donuts by name, chairman Howard Schultz says consumers over time will not be satisfied with a "commoditized experience or flavor." They will trade up to the company that built the industry.
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