Starbucks fights downturn with free refill promotion

by Daniel Farey-Jones, Brand Republic 30-Jul-08, 09:05

LONDON - Starbucks is resorting to US diner-style free refills at its UK and Ireland outlets in response to consumers tightening their belts.

The coffee chain, which has 670 cafes in Britain, has introduced the offer of a complimentary cup of filter coffee to anyone buying a hot drink and will run it for an indefinite period.

The tactic provides another sign that Starbucks' travails in the US, where it has closed 600 outlets, are extending to other markets.

Yesterday, Starbucks announced the closure of 61 of its 85 cafes in Australia, resulting in 685 job losses, as well as 1,000 redundancies in its home market.

Jim Alling, head of international operations since September, is leaving the company. He will be replaced by the former incumbent, Martin Coles, who is currently chief operating officer.

The complimentary coffee promotion appears to show the Seattle-based corporation's British arm is recognising what chief executive Howard Schultz said earlier this year about its premium offering struggling in tougher economic times.

Schultz said: "Starbucks coffee and premium coffee experience has, over time, been an affordable luxury. And at this time, it isn't for some people."