Why Whole Foods Sold 25 Cent Coffee
Posted on Monday, October 5th, 2015 at 7:00 am
In September of 2015, Whole Foods did something unexpected. They sold cups of coffee for just 25 cents each. That might have been the least expensive cup of coffee that customers could obtain. Why did Whole Foods choose to sell cups of coffee for such a low price?
Whole Foods stores have a coffee bar. Usually, they sell coffee for a price that would allow the store to make a profit. This isn’t difficult to do, since coffee doesn’t cost too much on its own, and people tend to want coffee at all hours of the day.
In September of 2015, Whole Foods offered customers a cup of coffee for only 25 cents. (It appears that this special offer terminated at the end of September). Anyone who walked in the door could have a fresh cup of coffee for 25 cents. There wasn’t a limit on how many cups of 25 cent coffee a customer could receive.
Why did Whole Foods lower the price so dramatically on a product that they typically make money on? The answer is that the inexpensive coffee was used to attracted customers. People came in to get their 25 cent cup of coffee. Many of them shopped while drinking it.
The true purpose of free samples – and super inexpensive cups of coffee – isn’t to make customers feel happy or to reward customers with a treat. The real goal is to entice customers into the store. Once the customer enters the store, he or she will probably find some other items that they want to buy.
For example, people who got their 25 cent cup of coffee might have purchased a sandwich to go along with it. Or, they might have shopped for groceries more slowly than usual, while they finished their coffee. Perhaps they saw something on a shelf that they hadn’t noticed before, and decided to buy it.
In other words, when a grocery store offers 25 cent coffee, or free samples of food, it isn’t simply to be nice. The goal is to encourage customers to stick around and buy more stuff. The store loses money on the freebie (or inexpensive coffee) and hopes that they will more than make up for that loss in the money the customers spend.
Keep this in mind the next time you are offered a free sample while you are grocery shopping. The store is hoping that you will like the free sample so much that you buy the product. That’s fine if you already were intending to buy the product. But, if you had never heard of it – you might get tricked into spending more than you planned to.