Starbucks Offers 40% Discount on Holiday Merchandise

Douglas A. McIntyre

Starbucks Corp. (NASDAQ: SBUX), like many other retailers, has inventory left over from the holiday. Its solution? Discount the items and hope to clear them out. Likely, Starbucks will make little or nothing on the products, but holding them until next year is a poor option, if it is an option at all.

Unlike retailers that lost holiday sales because of weather, Starbucks’ own holiday inventory is almost certainly a small portion of its total revenue potential. However, Starbucks already has begun to promote gifts for Valentine’s Day, looking for revenue well into February.

Starbucks has kept some of the holiday products in its own warehouses, and it may have had local stores ship them back to central locations. Starbucks is only offering discounts to this inventory online. Shelf space is precious at Starbucks, as is the case at any fast-food retailer. Old products are a poor use of display space.
What has Starbucks done to clear out holiday products? Among other things, “buy one, get one free.” This is the offer on Christmas K-Cup Packs and Christmas Blend, Ground.

Dumping old inventory is usually a sign of desperation. In the case of Starbucks, it is just good business.