Krispy Kreme finds “depression era” price for coffee doesn’t pay

Last fall Krispy Kreme tried to grab some market share in the Northwest by rolling back coffee prices to “Depression era” levels. The “New Deal” marketing effort cut prices from for a small from $1.45 to a nickel, mediums went from $1.65 to a dime and larges from $1.75 to 15 cents. It was A) a nice thing to do in this economy and B) KK figured that it made fiscal sense for them because they make most of their money from donuts not java.

At first things went well, very well. In March sales of Lutheran gasoline (mocha) were up 229 percent over pre-price cut. Melissa Allison, who covers coffee for the Seattle Times (that’s gotta be like having the philosophy beat in ancient Athens), says cheap joe may not be enough. Turns out people weren’t buying the baked goods needed.

Today Gerard Centioli, CEO of Icon LLC in Seattle, which co-owns (with Krispy Kreme) 12 stores in the Northwest and Hawaii, tells Allison (does she ever get confused about which of her names goes first?) that two of the stores now require you buy something baked in order to get the coffee deal.

"They were experiencing a level of coffee-only purchases which will cause us to either require a purchase or discontinue the program. If the test becomes permanent, we will develop marketing materials to communicate the change to our guests.”

Still a heck of a deal. Now all we need is a good five cent cigar to go with it.

Advertisement