- Starbucks is reportedly reversing its recent push into frequent promos on drinks and snacks.
- The move is part of CEO Brian Niccol’s effort to re-establish the brand’s upscale, premium vibe.
- Promos, which are primarily available in the app, have contributed to the frenzy of mobile orders.
Starbucks Rewards members’ apps may soon be a little quieter.
The coffee company is reversing its recent push into frequent promos on drinks and snacks, the Wall Street Journal reported, citing executives and baristas.
The move is part of CEO Brian Niccol’s effort to re-establish the brand’s upscale, premium vibe by focusing on hand-crafted drinks that invite customers to stick around the café a little while longer.
The company did not immediately respond to a request for comment from Business Insider.
It’s a sharp reversal of the discount strategy favored by Niccol’s predecessor, Laxman Narasimhan, who touted the traffic-boosting effects of shipping out digital coupons through the Starbucks mobile app. Narasimhan said on an earnings call earlier this year that 60% of the company’s sales are from the nearly 34 million Starbucks Rewards members.
Multiple baristas had previously told Business Insider that the size and frequency of Rewards deals were getting out of hand.
Now the Journal reports that Starbucks is handing out extra loyalty points instead of discounts and that no broad promo campaigns are planned for the holiday season.
In curbing its discounts, Starbucks is bucking a wider retail trend that has seen companies such as McDonalds, Pepsico, Walmart, and more cutting prices.
In a note last week, BofA Global Research analyst Sara Senatore wrote that she expects Niccol to run Starbucks in a similar manner to how he ran Chipotle, “including more efficient use of the existing marketing budget.”
As CEO of the “guac-is-extra” chain, Niccol wasn’t shy about charging customers more, either.
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