Starbucks Tries ‘Happy Hour’ to Perk Up Sales

Frappucinos will be half price this week

   

Imagine it’s summertime, the workday is almost done and you’re in the mood for a nice cold one.  Normally, that cold one would be a beer — not a cup of Joe — but Starbucks Corp. (NASDAQ: (SBUX) is hoping to change that. This week marks the return of its Frappaccino Happy Hour.

The Seattle coffee giant says it will sell the frosty coffee treats for half price from 3-5 p.m. daily through May 15.  To get coffee lovers primed to make the drink a regular daily treat, Starbucks is allowing customers to have the drinks mixed anyway they like at no extra charge.

That’s right.  Any sort of milk, syrup, flavoring, topping and amount of coffee for the same Happy Hour price.

For parents looking to share the experience with their kids without the coffee, Starbucks is bringing back the coconut mocha flavor, along with the coffee-free coconut creme variety.

If the caffeine doesn’t hook you, then the sugar is sure too.  At least that’s what Starbuck’s is counting on.

So far, Starbucks sales have continued to grow, with fiscal second quarter sales up 10% compared to the year ago period.  But rising gas and food prices has consumers once again pinching pennies, and a daily Frappaccino diet might be just as hard on the average consumer’s wallet as it is on their waistline.

With dairy prices on the rise, Starbucks runs the risk that profit margins could erode during the Frappaccino promotion. But the company has to risk it.  The Frappaccino helped make Starbucks the coffee giant it is today and will likely account for a majority of its sales over the next few months so it will need to do everything it can to build enthusiasm for the icey drinks.  That includes sending daily text messages.  Customers who text MIXIT to 44264 will receive a daily text message to remind them of the Happy Hour blitz.


Article printed from InvestorPlace Media, http://investorplace.com/2011/05/starbucks-nasdaq-sbux-stock-happy-hour/.

©2014 InvestorPlace Media, LLC

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