Starbucks Korea has announced a significant expansion of its 'One More Coffee' program, offering customers the opportunity to purchase a second cup of select coffee beverages, including Americanos, at a discount of up to 60% when buying the first at full price. This initiative, previously piloted for Gold members in February, will now be available to all Starbucks Rewards members, totaling approximately 14 million, starting from April 23rd.
Under this program, customers who order one of the four designated coffee options – Today's Coffee, Iced Coffee, Caffè Americano, or Caffè Latte – will receive a discount coupon valid from 30 minutes after purchase until the store's closing time on the same day. Notably, the second cup of Today's Coffee or Iced Coffee will be priced at 1,800 KRW, while a decaf or half-decaf Caffè Americano will be available for 2,000 KRW, effectively offering a 'half-price coffee' benefit. This is anticipated to be an appealing option for consumers seeking reasonable prices in the current era of high inflation.
Industry analysts interpret Starbucks' aggressive marketing strategy as stemming from a deep consideration of the rapidly changing coffee market landscape. With the increasing importance of cost-effectiveness among consumers, the number of office workers frequenting budget coffee franchises has been on the rise. For those who consume multiple cups of coffee daily, Starbucks' regular pricing could be a financial burden. However, offering a second cup at a significantly reduced price enhances Starbucks' price competitiveness and aims to expand its loyal customer base.
Furthermore, the strategy of encouraging initial orders of coffee beverages suggests an intention to increase the proportion of coffee sales among overall drink sales. The high coffee consumption rate in South Korea has historically been advantageous for achieving economies of scale. However, with a growing preference for diverse beverages, the variety of menu options has expanded. Since the 'One More Coffee' discount requires the first drink to be one of the four specified coffee types, this naturally leads to a higher percentage of coffee sales, which could ultimately improve the efficiency of labor and raw material management, positively impacting profitability.
An industry insider commented, "Starbucks' 'half-price coffee' policy is expected to significantly impact the afternoon sales of budget coffee retailers immediately." They further added, "If other major coffee franchises join in with similar policies, a full-fledged competition with the budget coffee market will be inevitable."
This bold move by Starbucks is poised to reshape the competitive dynamics of the domestic coffee market, providing consumers with more diverse choices and benefits. The industry will be closely watching whether Starbucks' 'One More Coffee' strategy can inject vitality into the sluggish coffee market and serve as a new growth engine.
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