Much like it has done to just about every other facet of Canadian bills, inflation has come for your morning coffee.
Starbucks is rolling out new rules for its loyalty program in the United States and Canada on Monday, changes that in some cases could see customers need to use twice as many points to get the same items they got before.
Customers will need to spend 100 stars — the chain’s version of reward points — for most of its most popular individual items, including a hot drip coffee or tea, a baked good or prepackaged snack.
Previously, those items only cost 50 stars. How much they get you is changing, but the way to earn them is the same: a customer gets one star for every dollar they spend on Starbucks items using cash, debit or credit. Paying with a preloaded gift card will earn two stars for every dollar spent.
It’s not just the basics going up, either. More expensive items like Frappucinos or hot breakfast items will now cost 200 stars instead of 150, and the price for a salad or sandwich is going from 250 to 300 stars.
A small number of items are getting comparatively cheaper, however. A 454-gram bag of packaged coffee that previously cost 400 stars will now costs 300, and an iced coffee that used to cost 150 points will now available at the cheapest, 100-point tier.
Patrick Sojka, founder of Rewards Canada, says points devaluation is one of the biggest pet peeves among his membership. (Anis Heydari/CBC)
“To ensure the long-term sustainability of the Starbucks Rewards program and to meet the changing needs of our members, we occasionally need to make changes to the program, and while some items may require additional stars to redeem for, other popular items like iced coffee and packaged coffee will need less stars to redeem for and be easier for members to be rewarded,” a spokesperson for Starbucks Canada told CBC News in a statement.
It’s not the first time the company has recalibrated its reward program, with the previous major change coming in 2016 when the company switched from a system that gave reward points based on the number of visits to one that doled them out based on how much money was spent.
Indeed, Starbucks isn’t the only coffee chain watering down its reward system of late. In December, Tim Hortons made similar changes to its loyalty program, hiking the price of a coffee from 70 points to 400. (Timmies shoppers earn 10 points for every dollar they spend at the chain.)
U.S. chain Dunkin’ Donuts rolled out similar changes in October.
Patrick Sojka, the founder Rewards Canada, says the devaluation of loyalty points is probably the No. 1 issue for the loyalty point fanatics who make up his company’s customer base.
“It’s huge among the whole points and miles world,” he told CBC News in an interview. “Whether it’s travel like with frequent flyer programs, frequent guest programs, or in this case with coffee programs [there’s] lots of negativity around that.”
Sojka said he expects Starbucks to get some blowback for essentially slicing its reward tiers in half, but ultimately the chain is doing what they’re doing because they know they can.
“For the first couple of months [customers are] not going to be happy,” Sojka says. “But they’ll go back to their old ways after a few months. We’ve seen it time and time again.”
Kendra Tanev is the type of customer that Starbucks is banking on.
“I do collect the points, but … half the time they probably go to waste because I don’t really redeem them regularly,” she told the CBC outside a Calgary Starbucks location recently. “I’m going to buy the product anyway, so it doesn’t really matter.”
Watered down Starbucks rewards leaves bitter taste
Starting today, Canadian members of Starbucks loyalty program will have to spend twice as much as before to get a ‘free’ cup of coffee. Coffee drinkers in Calgary shared their thoughts on the change with CBC News.
But there are other customers for whom the change has left a taste a bit like burnt coffee in their mouth: bitter.
Calgarian Sheldon Harrish said he used to go to Starbucks seven days a week, but the current era of high inflation has him much more aware of his spending, so he’s drinking more coffee at home lately, and going to Starbucks half as often as he used to.
News that his loyalty points would soon be worth half as much, too, makes him even less likely to go from now on.
“It becomes less and less of an incentive,” he said. “It makes you look for other alternatives.”
Fellow Calgarian Megan Williams had similar thoughts. “I think I spend enough money at Starbucks as it is, the drinks are not cheap, so yeah, it definitely bothers me,” she said. “I probably won’t go as often anymore.”
Loyalty test
Nicole Rourke, a professor of marketing at St. Clair College in Windsor, Ont., says that it’s well known that loyalty points are a fairly inexpensive way for brands to create repeat customers, but they are starting to get watered down to the point where they are losing their effectiveness.
“Most frequent Starbucks customers are buying the same things over and over again. If you make it more complicated for them to get free ones, I just don’t think they like it,” she said. “They’ll come up with reasons why they should go somewhere else.
She said she recently discussed Starbucks’ changes in a class with her third-year students, and the conversation among a group of brand-savvy young consumers was eye-opening.
“They already felt like it took a long time to get any big rewards back,” she said, adding that rolling out the changes the day before Valentine’s Day “is not making them feel the love…. It’s making them feel like they want to be less loyal.”
HALIFAX – Ottawa is negotiating a $500-million bailout for Nova Scotia’s privately owned electric utility, saying the money will be used to prevent a big spike in electricity rates.
Federal Natural Resources Minister Jonathan Wilkinson made the announcement today in Halifax, saying Nova Scotia Power Inc. needs the money to cover higher costs resulting from the delayed delivery of electricity from the Muskrat Falls hydroelectric plant in Labrador.
Wilkinson says that without the money, the subsidiary of Emera Inc. would have had to increase rates by 19 per cent over “the short term.”
Nova Scotia Power CEO Peter Gregg says the deal, once approved by the province’s energy regulator, will keep rate increases limited “to be around the rate of inflation,” as costs are spread over a number of years.
The utility helped pay for construction of an underwater transmission link between Newfoundland and Nova Scotia, but the Muskrat Falls project has not been consistent in delivering electricity over the past five years.
Those delays forced Nova Scotia Power to spend more on generating its own electricity.
This report by The Canadian Press was first published Sept. 16, 2024.
TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.
The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.
“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.
The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.
But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.
Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.
“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.
“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”
Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.
The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.
In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.
Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.
The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.
The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.
Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.
Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.
It will also re-evaluate its design ranks.
Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.
Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.
No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.
About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.
Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.
Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.
A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”
This report by The Canadian Press was first published Sept. 12, 2024.
