Does Starbucks Have a Flop on Its Hands?
Dec 15th 2012 10:00PM
Updated Dec 15th 2012 10:16PM
Verismo sounds a bit like "very slow," and that may be just how well Starbucks' single-serve espresso maker is selling.
"Tell Santa he can save $50 on Verismo," promises the java giant on its website's landing page.
Between now and Jan. 1, Starbucks is shaving $50 on the entry-level Verismo 580 brewer. The 25% price cut takes it down to $149. The higher-end V-585 model is actually getting a larger $100 haircut to $299.
Hear that, Santa?
Investors sold shares of Green Mountain Coffee Roasters earlier this year, fearing that having Starbucks throw its hat into this ring would dent the company's Keurig empire. We really don't know if that's happening or not, but it sure is suspicious to see a $50 price cut for a product that hit the market only three months ago.
Anecdotal evidence seems to point at Verismo as a bit of a flop. Starbucks.com allows customers to review the products they're buying, and it has just five reviews so far for what is now the $299 V-585 model. Making matters worse is that four of the five reviews rate the brewer just two out of five stars. The owners are complaining about the poor build quality, product malfunctions, and misrepresented features.
It probably doesn't help that they are just seven coffee varieties available. How can Starbucks let buyers choose from four different colors on the exterior of the 580 model but still only give them a small handful of options? The original Keurig doesn't make espresso, but at least it now has more than 200 K-Cup flavors to choose from.
We'll see what happens come Jan. 1. It seems highly unlikely the that high-end model can justify its original $399 price tag, and we'll have to see if going from $199 to $149 on the more accessible 580 model will break through to consumers.
Santa, we've got a problem.
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The article Does Starbucks Have a Flop on Its Hands? originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz owns shares of Green Mountain Coffee Roasters. The Motley Fool owns shares of Starbucks and has options on Green Mountain Coffee Roasters and Starbucks. Motley Fool newsletter services recommend Green Mountain Coffee Roasters and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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