Starbucks CFO's comments about VIA win him the Bullshitter-of-the-Day Award

Starbucks Chief Financial Officer Troy Alstead tells the Wall Street Journal: "We expected a [first-quarter bottom-line] contribution from Via, but it was even more than we expected." Ha, ha, ha! Everyone here knows that VIA "sales" were goosed by ringing up other products as VIA purchases, by making under-the-counter deals to get VIA out the doors, and by basically brow-beating employees into moving the stuff. VIA sales were exactly as fudged -- er "expected," as Mr. Alstead knows. Read "Starbucks Growth Revives, Perked by VIA"

Comments

[tivoboy]

I call bunk on this. If the VIA sales increased overall revs, it doesn't make sense. People would buy VIA as a partial REPLACEMENT not only as an incremental add to their daily/montly coffee usage. They MUST take out a latte or coffee here or there and use VIA. So, I would say this is a one time thing, reduction of Gold discounts, added foodies, something else.

[barista]

Interesting, I never had anything rung up under via, nor have I witnessed any of the other "tactics" this heading claims were employed.

[Jim Romenesko]

barista, you're apparently new to this web site. One example from a comment on Starbucks Gossip from last September:

>>>>>> A quick anecdote about how we met our via goals on a deadline. My DM made me do a manual purchase of 100 bucks worth over the phone, only to return it a week later when the goal was in the bag. does this type of shell game smell of integrity to you guys? what are we likely to see in the way of rule bending when the stakes get so high?

Go back to last fall's posts and you'll find more.

[s]

We have to report Via sales so often to the DM, that we will do just about anything to avoid confrontation if the number is too low. Selling Via is job security.

[Jim Romenesko]

At one of the Evanston stores I frequent, the store manager one day last week announced from the counter, "Buy one box of VIA and I'll give you one free!" It was quite odd.

[jabanga]

could the "improved" same store sales have as much to with the closing of many underperforming stores as much as anything else? get rid of the stores with negative sales growth and your comp sales average goes up.

[SM 4 SBUX]

You know, I have heard of, and even seen these "fraudulent" VIA sales tactics first hand. The nice part is that in EVERY instance, the partners, including the store manager sometimes, we terminated for ethics & integrity violations.

There was a lot of "pressure" to make VIA a success, and admittedly, most baristas couldn't sell a pound of coffee (due to lack of coffee knowledge), let alone something with such a bad vibe as instant coffee, Starbucks or not.

[A. Nony Mouse]

Yes, at least in my district they've curbed the BS sales by terminating people.

The thing that really pissed me off is that when our store was a post-holiday mess, our DM would come in and ask how much VIA we had sold. Excuse me? How about you give us another person on the floor to help clean up this disaster that our store became in December.

[Jason Coffee]

I always thought that the VIA promotion was weird to be honest. What was the tag line? "We bet you can't tell the difference?" Really if I can't tell the difference then why would I ever spend more money on the real stuff? or come into my local store to buy coffee? So what it says to me is one of two things:

#1 - Our VIA is so good that you should never come into the store and pay more money for our Brewed Coffee. - Because it is only equal to our instant coffee and costs less.

OR

#2 - Our Brewed Coffee is so bad that you wont be able to tell the difference between it and instant coffee.

Either doesn't really sound like a message I would want to send but non the less they did. I talked a bit about this in my Blind Review of VIA a couple months ago.

When it comes to inflating #s I just don't know if this is true across the board. No doubt there are a few employees doing this but to say it is true across the board is a pretty broad statement to make. I know that at my local store they were selling a lot of it and the employees seemed to be excited about it for the most part.

Cheers!

Jason Coffee
Coffee Cup News

[Faded Coffee Master]

When I hear Howard and company speak at a quarterly results call and pronounce Via a success I think back to the other "successes" of past calls like "Vivano", "oatmeal" and "Chantico." Starbucks voices hype over new products and then they fade away into oblivion within 3 months. Did they speak today of how these other products are fueling profits and comp store sales??? Its all lies and at the Q2 call Via will be long forgotten.

[.]

What do you do when your DM calls you and says, "You need $150 in Via sales by tomorrow. This is not optional." ??? They kinda leaves you no choice sometimes.

[harmaa]

This makes me want to vomit, after knowing the pressure and tactics they forced us to implement in order to sell this crap. Get it in the grocery stores and off our shelves!

[facebook is not my life, i swear...]

^like

[aaron]

theres alot of pressure to sell VIA but nothing crazy like that in our area i mean sometimes us as partners will buy via to meet our sales but i mean my store was the #2 store for via sales in our entire area and we did nothing shady like the stuff your talking about

[K.Latte]

Via has truly sucked the joy out of working in my store. It's pathetic how much we're asked to push this garbage.

[adoubleshotofclarity]

Faded Coffee Master - When was the last time you heard Howard say "our espresso drinks are fueling profits" or "Frappuccino is fueling profits"? By your logic, we should cut those too.

[Anony-girl]

These fuckin people are so out of touch with the reality of actually working in a store, they wouldn't know a latte from a glass of hot water.

[Just keeping it real]

The only reason they are pushing VIA is because we make such a retarded profit on it. Same with Oatmeal, Tea Lattes, and everything else that is essentially a terrible idea. Why else do you think they could do $1 off of a $3 item and still make a HUGE profit? I miss when we had the black apron exclusives, with the tasting kits so everyone was knowledgeable BEFORE the coffee came out, and we all were passionate about coffee. I feel like with every new promotion is another nail in the coffin. VIA is the death to what Starbucks was, and no offense- if you work at Starbucks and can genuinely say that VIA is a good idea, and tastes good you are working at the wrong place because you have no clue what coffee is supposed to taste like.

[bayareabux]

I'm not so sure this was the top BS from Alstead. I noticed a few other good ones...

1) He seemed to say that more prices went down than up, so Starbucks wasn't raising prices.... um.... a tall latte, tall tea, and tall coffee went down a nickle. Everything else went up, up, up. Price increase without the stigma of calling it that -- way to go Troy!

2) If brewed coffee sales mix didn't spike during the recession, let's be honest here, there could only be one reason for that: Pike Place Roast is so bad that customers would rather NOT VISIT than come in to buy that crap.

Any other good ones out there I missed??

[Argentius]

For all who pretend there were not pretend-VIA sales:

I never saw anyone actually RINGING UP another item as Via, as alleged, but I did see lots of stuff like, "Buy a 3-pack of Via, and I will comp your Venti White Mocha."

IOW, get $1 off your drink for taking a pack of Via off of the store's hands.

That is a free sample, not a sale.

[SDlifer]

Howard was quoted again in the paper today...spewing out his nonsense of "romance" within starbucks stores. there is NO romance whatsoever in starbucks and there hasn't been for years and years. decades.

don't you starbucks faithful get tired of reading the same statements every year? i'm glad i got out...the scene in my former district had nothing to do with "romance" or coffee and had everything to do with via targets and working yourself into the ground.

howard schultz makes me want to vomit. the day he manages a store and has dm's treating him like garbage would be a day i'd love to see.

[SDlifer]

aaron,

why would you buy via from your store? so you make crap wages and then you feel compelled to pay for more via (which you would get free with your markout). how noble of you...or pathetic. our region needed to be at 212%!?!?!?! come on...212%? and the amount of pressure to buy the crap was intense.

[microgrind]

I recently left Starbucks. I gave my notice. I was not forced out, or put on a PIP, nothing like that. I had never been written up for anything in my whole career. I was with the company for over a decade and a half. I bought in to the whole thing lock stock and barrel. I had to leave because I was being asked to do things that I knew were wrong and lacked integrity. I was asked to put my team right up against an integrity issue and look the other way when they crossed the line. I could not sleep nor live with myself any longer. It is very sad what this company has become. Anyone with a conscience needs to get out. This company is not interested in taking care of it's people any longer - period. Do not be an apologist and try to justify anything it is doing right now. Do not trust the message, please. For goodness sake please.

[ihatelattes]

I and some of my fellow partners were fired because my SM gave us explicit instructions to ring up every drink as VIA. Then she threw us all under the bus.

[john]

LOL ring everything up as via LMAO, ROTFL, that is the funniest thing ive heard.

[Just keeping it real]

@ microgrind - I can't agree with you more. My first CA ever was because of VIA. Something I was told to do, then threw under the bus and used as a scapegoat. I miss what this company was.

@ john - either you're oblivious or retarded. pick one. It's a nationwide problem, and is for most promotions. Just because you are at one of the 5% of stores that don't cheat, doesn't mean that all the other stores in your district don't. After years of playing it the right way, it eventually breaks your spirits when all the cheaters get recognized on a regional level and promoted when you get harassed several times a day because you could do 1 more USD - even though you are doing it legitimately.

[Sbux Lifer]

Honestly, I don't feel like manipulating the numbers is wrong. In many of those situations, the customer ends up paying less than they would have. They get the VIA, they get the drink. Everyone wins. This isn't an everyday practice, but when it comes to crunch time, it happens. Sbux is a publicly traded company the relies (sometimes too heavily) on % and $ of whatever the current promo is. Perhaps I'm just fortunate to have customers who get it, but they have grown to expect me to push whatever it is that quarter I need to push. But hey, it's not as bad as it USED to be, I no longer have to bring out the used-car salesman in me to get you out the door with a $1000 machine.

[Farcaster]

Sbux Lifer...Thanks for the perspective. I totally forgot about the brewing sale and how crazy that was. It really makes via seem that much easier. Wow, those brewing sales were demanding.

[EL_barto]

Barista,

so you have not witnessed any "tactics" being employed ?

Here are some examples for you :
- sell a coffee traveler made of VIA instead of brewed coffee because it's a better deal.
- support the troop by asking customers to buy VIA to send overseas so your store can beat his goal (poor soldiers)
- free tall coffee when you buy a 12 pack
- at launch, dollar off coupons and free tall coffee (even if you don't have the coupons anymore)

so Barista, where have you been for the last 6 months? Dunkin donuts ?

If VIA was great, people would simply buy it. Unfortunately, it is not the revolution Howard expected. Starbucks has the frappuccino, BK the Whopper, McDonald's the Big Mac ...

[starbuckscard]

No truer words have been spoken here in quite some time: "If VIA was great, people would simply buy it. Unfortunately, it is not the revolution Howard expected. Starbucks has the frappuccino, BK the Whopper, McDonald's the Big Mac ..."

Though I think at this point, I'll skip the frappuccinos, now that all that's left is the B.S.

Followed by.....Maybe VIA is revolutionary. It just isn't causing the revolution Howard hoped for !!!

[dcunstrukt]

Do these sales also encompass what was sold, under the idea of sending to the troops, and most stores took months before the DMs picked up the collected VIA, and none of us were sure it was ever sent?

[Barista]

Via is a joke.

It's "success" in my store is due to threats from our DM. If we don't sell one packet of Via for every shift we work in a week, we get written up. Unfortunately for him, scare tactics don't take well in my store.

We've also been asked to use several other tactics, such as voiding out a customers order if they purchase a 3 pack of Via.

[Costa Rica Homes For Sale liberia]

I think facebook is a great social bookmark that crosses borders and unites millions of people around the world, we must use a tool to convey good wishes for peace and prosperity

[Juicy Couture Bags]

where did u find the bird, does it not on the tree?