Why is Starbucks 50% off?

Business Insights Podcast

A Starbucks Grande Caramel Frappuccino is typically listed at around $5.65 on the chain’s menu boards. These days, many customers pay about half that price.

For a grande-size brewed coffee, same deal: An average listed price of $3.65 rings up more like $1.83 with a buy one get one free offer.

After largely ignoring special deals for decades, Starbucks is now often selling coffee at a discount. The world’s largest coffee chain is trying to bring back lapsed customers, betting big on BOGO offers, supersize perks for loyalty members and other deals.

The company ran promotions for about half the month of May, according to documents viewed by The Wall Street Journal. This month, for the first time in more than a decade, Starbucks began offering bundles of coffee and breakfast food starting at $5.

“50% off a drink. It’s on,” Starbucks said in a recent email to customers. “Keep checking the app all summer for more deals heading your way.”
Surging inflation over the past several years is now spurring more Americans to rethink their spending on everything from food to furniture.
Some consumers have been reconsidering their Starbucks habit. The average price for a grande brewed coffee earlier this year was $3.65—49% above 2020 levels, according to the market-research firm Technomic, which tracks prices at the chain.
The chain’s U.S. traffic dropped 7% in the three months ended March 31 from the prior year, the biggest quarterly decline since at least 2010, Starbucks said. Its active loyalty-rewards users decreased by 1.5 million between Dec. 31 and March 31.
This is why they are doing 50% deals to increase store traffic.