Filed under: Consumer experience, Starbucks (SBUX), Marketing and advertising
With its stock teetering near 5-year lows on concerns about its growth prospects and style drift from its roots as a coffee shop, returning Starbucks Corp. (NASDAQ: SBUX) CEO, Howard Schultz, stated earlier this year that the company would stop selling sandwiches.
Let the backtracking start. The Wall Street Journal reports (subscription required) that Starbucks won’t be discontinuing sandwiches after all. Rather, the sandwiches will “evolve,” according to a Starbucks spokesperson. The company will use a different kind of cheese and less butter in an effort to prevent the scent of sandwiches from overpowering the aroma of coffee.
This looks to me like a move motivated by Wall Street rather than a broad corporate vision. Mr. Schultz made it clear that he wanted to get rid of sandwiches back in January, telling investors that “In short, the scent of the warm sandwiches interferes with the coffee aroma in our stores, which is the key to the coffee experience that forges our connection with customers.”
Did it all of a sudden occur to Schultz that it might be possible to make the sandwiches less pungent? I somehow doubt it. Rather Starbucks looked at the fact that sandwiches make up 3% of the company’s sales — plus whatever additional coffee sales they generate — and that, with the stock about 50% of its 52-week high, this just wasn’t the time to take a same-store sales hit in the name of long-term vision. If this were a private company, I seriously doubt that they’d have reconsidered the plan to cease selling sandwiches. The power of the institutional imperative appears to have trumped Schultz’s ideas for returning the company to its roots.
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