Earlier this week, Starbucks (NASDAQ:SBUX) announced the launch of a limited-time "Pairings Menu." Analysts at Wolfe Research provided their thoughts on the company's latest move.
The Pairings Menu allows customers to choose a hot or iced coffee or tea combination with a croissant starting at $5 or a hot or iced coffee or tea combination with any savory breakfast sandwich starting at $6.
The promotion is available starting June 11 and comes after the company reported disappointing second-quarter results. Its CEO noted that the company is having difficulty attracting customers who are short on cash.
Analysts said they think Starbucks' entrance into the $5 bundle game could help increase traffic to the stores with the "occasional" customer, given the noticeable value of the deal.
In addition, they feel it will introduce food to all customers who may have previously held back due to the price point and help food attach over the long term.
"We see a greater opportunity from this deal vs. Starbucks' recent promotional calendar for its Rewards users. We are waiting to see how effectively the company can market this "Pairings" deal," said analysts.
"Results from our recent consumer survey suggest that frequent coffee consumers who have the Starbucks app have better relative value perception (than those without the app)," they add. "We think Starbucks' push to bring consumers to the app could help further increase value perception over the medium-term."