Valuetainment - May 07, 2026


＂An AFFORDABLE Premium Experience＂ - Starbucks CEO's TONE DEAF Defense Of $9 Coffee


Episode Stats


Length

12 minutes

Words per minute

190.47

Word count

2,354

Sentence count

141

Harmful content

Hate speech

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Rob and Brandon discuss the backlash to Starbucks CEO Brian Nickel's comments about improving the $9 coffee experience at the coffee chain. They talk about why this is a good idea and what it means for the bottom line.

Transcript

Transcript generated with Whisper (turbo).
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:00.040 Okay, when I sell my business, I want the best tax and investment advice.
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00:00:30.000 Starbucks CEO, Brian Nickel, whom we love, we're very complimentary of.
00:00:35.660 He had a rough week after he made this comment about finding ways to improve the $9 coffee experience at Starbucks.
00:00:42.620 Some people said at least he's being honest.
00:00:44.860 Some people said this is a little bit crazy to talk like that, especially at a time where people are dealing with inflation, gas prices.
00:00:51.860 Here's the CEO of Starbucks, Brian Nickel.
00:00:53.600 Go ahead, Rob.
00:00:54.040 In some cases, a $9 experience does feel like you're splurging.
00:00:58.960 And then what that means is we have to make it worthwhile, right? 0.91
00:01:02.500 We've heard so much this year about the K-shaped economy, fortunes for some Americans, very different than for others.
00:01:07.520 Is that not really something that's coming up in your sales?
00:01:11.100 You know, we're not seeing that in our business.
00:01:13.340 What we're seeing is people, you know, they want to have a special experience.
00:01:18.840 And regardless of what your income level is, in some cases, you know, a $9 experience does feel like you're splurging.
00:01:26.660 And then what that means is we have to make it worthwhile. Right. And then in other cases, people believe, well, this is a really affordable premium experience because they're saying, like, well, it's less than ten dollars and I get a really premium experience.
00:01:40.380 So regardless of where you're stationed in those income cohorts, we want to make that experience worth your while.
00:01:46.900 And what we know is what's definitely something that drives that value is to be able to have a great seat, have a great moment of connection with a barista.
00:01:55.460 Brandon thoughts yeah so I think I'm going to surprise you here so I I mean I think this guy's
00:02:00.380 a beast I think he crushed you at Chipotle I think he's doing the right thing here and I you know the
00:02:05.560 people are gonna get mad because they have the impression maybe that everybody is a Starbucks
00:02:10.060 person but no it's not the case it's probably 20 percent of the population that are Starbucks people
00:02:14.060 and then you know everybody's a Dunkin Don'ts person maybe so if the most money comes from
00:02:19.480 that upper echelon of people that the top 20 percent of income so people who could afford
00:02:24.260 nine dollars that's their target customer they're not targeting the people who are you know living
00:02:28.100 paycheck to paycheck and i think that's a smart move and i think um you know he talks about
00:02:32.340 experience like something as simple as not having long line weights like that that was the biggest
00:02:36.700 thing that would turn me off from starbucks it's like you um bad service you know rude um baristas
00:02:41.880 long waiting in line dirty tables dirty seating uh whatever so if you get that stuff squared away
00:02:47.760 if you get the experience faster more efficient then people you know in that top 20 won't mind
00:02:51.980 paying nine dollars and that's who they should be concerned about so yeah people who are outraged
00:02:55.960 about that i think they don't understand who um starbucks's icp is tom do you agree with them
00:03:01.060 uh i agree in principle i think what happened here with brian nickel is number one you know
00:03:06.780 everybody's looking for headlines and this was the wall street journal doing their their am mini
00:03:10.640 pod or something something like that i think it was where this was covered and he was talking
00:03:14.960 about a nine dollar experience making it worth the while so he's talking about i have a duty to
00:03:19.420 deliver to my customer you spend nine dollars or three dollars and he used nine dollars in his
00:03:25.500 example i have the duty to deliver to you something great i deliver a product deliver with the
00:03:31.140 experience deliver with everything's on there that's what i have a duty to do and instead people
00:03:35.580 take it and warp it and they use the nine dollars to create clicks and a headline because you know
00:03:39.920 what by and large the media thinks that ceos are bad you know i could go out one morning and say
00:03:45.820 good morning and people say people are dying in iran and tom says it's a good morning oh my gosh
00:03:52.220 they'll spin anything and so i think they we've latched on to this to make it bigger than what
00:03:57.280 it is this was a ceo saying i need to deliver on experience for whatever price you pay and in the
00:04:03.460 case of nine dollars that may feel like a luxury to you it may feel like you're splurging and if
00:04:08.280 it does i don't want you to feel ripped off i have to feel like you felt like you got something out
00:04:12.800 of it and so there's a little part of me i'm not defending starbucks particularly i'm what i'm
00:04:17.560 defending is the fact you have a ceo goes on you know a like a mini pod like that and you say
00:04:23.460 things and words get twisted and they make little headlines and that part of it i find is kind of
00:04:27.920 disgusting jeff yeah i think no i mean tom you're exactly right what he was saying is look you pay
00:04:33.620 nine dollars you got to give you value otherwise you're not going to come back um i think the
00:04:38.260 reason why people are having fun with it is because you don't think nine dollar value from
00:04:41.640 Starbucks, given everybody's experience at Starbucks, but he's exactly right. And the reason
00:04:46.460 why this is coming up, I think is even more important. They talk about the K-shaped economy,
00:04:50.920 but the K-shaped economy is now starting to impact higher income Americans. Look at Walmart.
00:04:55.760 Walmart has had a fantastic year. And the reason they've had a fantastic year is because $100,000
00:05:01.080 plus income earners are now shopping at Walmart. Dollar General is remodeling a ton of their stores
00:05:06.700 to cater to higher-income shoppers.
00:05:09.480 So what basically the CEO of Starbucks is saying is this economy is tough,
00:05:13.540 and we've got to start delivering value over and above what we thought we were delivering before.
00:05:17.620 So he's recognizing the economic climate and saying we need to do something about it.
00:05:21.140 And by the way, let me tell you, I saw a Walmart commercial yesterday in one of the games I was watching.
00:05:25.800 We had a couple friends over, and the commercial showed how quickly they're delivering faster than Amazon.
00:05:33.040 In an hour, two hours, you order something, it shows up.
00:05:36.820 Why?
00:05:36.940 Because there's a Walmart within a 10-mile radius of your house.
00:05:39.580 So they're able to do things.
00:05:41.320 So Amazon may have a – they have how many warehouses in America?
00:05:44.880 If you think about it, every store to them is what?
00:05:47.300 Every store to them is a warehouse.
00:05:48.680 Every store for them is a place where you can go.
00:05:50.780 Amazon doesn't have as many factories as they do, right?
00:05:53.260 So you have all these different – even though it says logistic facilities for Amazon.
00:05:57.180 Amazon's got 600 of them and very 1,100 fulfillments.
00:06:00.700 How many stores does Walmart have in America?
00:06:02.580 It's a lot of thousands. It's thousands. Yeah. And so they have an edge. But going back to what Brian Nichols said, 4,611 retail units in America.
00:06:12.400 Think about that. Supercenter is 3,500. Neighborhood market, 673 discount. Walmart realized what their competition was and they rebranded themselves.
00:06:21.520 Very good point there, Jeff. But let me go back to Starbucks. I want to know what is the profile of a Starbucks customer.
00:06:26.780 I just pulled it up.
00:06:28.180 So the average customer makes $60,000 to $150,000 a year, okay, for Starbucks.
00:06:35.440 And if you go even tighter, it's $80,000 to $100,000, the average person that goes to Starbucks, okay?
00:06:41.420 Estimated customer serves 4 to 5 million customers every day in U.S. alone,
00:06:47.000 90 to 100 million customer visits per week worldwide.
00:06:51.160 They have 35.5 million active rewards members in America, an all-time high.
00:06:57.060 35.5.
00:06:57.820 I never had.
00:06:59.400 Did you think there was going to be 35.5 million?
00:07:01.620 That's 10% of America.
00:07:03.620 That's insane.
00:07:04.100 That's insane.
00:07:04.640 35.5 million, that's part of the rewards.
00:07:06.720 The rewards members drive nearly 60% of all of U.S. company-operated revenue.
00:07:12.360 Crazy.
00:07:13.540 Those loyalty members spend $13 billion in America in 2025 alone.
00:07:20.460 Loyalty members visit Starbucks 5.6 times more frequently than normal customers.
00:07:25.880 About 71% of Starbucks app users visit at least once a week.
00:07:30.440 Roughly 21% of the customers return within three days.
00:07:35.820 Crazy.
00:07:36.680 Revenue annually, 2025, $37 billion.
00:07:39.380 So you're not going to get to a point there without knowing who your customer is, targeting it.
00:07:44.200 So he is saying that $9, I've got to find a way to get the experience to be better.
00:07:47.680 and if there's a guy that can figure it out, it's this guy.
00:07:51.020 He took Chipotle from $7 billion to $71 billion.
00:07:53.960 They know who they hired.
00:07:55.360 This is the guy that knows how to work this business.
00:07:58.700 His expertise, Chipotle order became on the app.
00:08:02.160 You would make the bowl in the app and you'd go pick it up.
00:08:05.220 He knows that business and Starbucks knew.
00:08:07.220 If we got 35.5 million active reward members in America,
00:08:10.380 let's bring the best guy that knows how to do this.
00:08:12.600 So I'm pro Brian Nickel and what do you say at the end of it?
00:08:17.680 You know, I endorse this message or whatever that they say.
00:08:20.180 I endorse Brian Nichol.
00:08:21.680 I'm a big fan of what he's doing.
00:08:22.860 Well, at least he's being honest, right?
00:08:24.060 I mean, come on.
00:08:24.820 Are you kidding me?
00:08:25.840 Exactly.
00:08:26.820 What else do you want?
00:08:27.920 You want me to lie to you?
00:08:28.820 No.
00:08:29.280 Yeah, this is the price.
00:08:30.560 Yeah.
00:08:30.820 You know, I think we need more.
00:08:32.200 And by the way, same with Jamie.
00:08:33.360 Jamie's kind of telling you, here's where we're at.
00:08:34.980 So kudos to Brian Nichol and I think the 35 and a half million people in Starbucks.
00:08:40.080 They're probably going to keep going back and doing business with those guys.
00:08:42.820 Those of you guys that did the survey, we originally thought, because it's a lot of questions, it was 27 of them.
00:08:50.020 We said, we're going to give a $25 gift card.
00:08:52.140 So we sat with finance and we said, guys, it's not like it's going to be that many anyways.
00:08:56.240 We said, let's put a budget of $25,000 to $50,000 for these $25 gift cards.
00:09:02.020 Well, the report comes out this morning from our digital marketing team.
00:09:07.040 11,976 of you did the survey, which is going to cost us $290-some-thousand dollars for this gift card.
00:09:18.920 And a lot of you guys were tweeting saying, am I going to get the gift card?
00:09:21.600 If you completed the survey, you check your email today at 9 o'clock.
00:09:26.840 They started sending all the gift cards from Shopify to go to vtmerge.com.
00:09:31.720 And so check your email.
00:09:32.980 If it hasn't, just remember, it's 12,000 people, so all of a sudden it was put in the system.
00:09:39.500 You're probably going to, if you haven't already gotten it, if you check your mail, you will check your email.
00:09:44.920 You will in the next 15, 30 minutes, one hour.
00:09:48.760 But go to vtmerch.com.
00:09:50.360 That $25 is a straight-up gift card.
00:09:52.560 Buy whatever you want.
00:09:53.300 We have a lot of good things that people don't look at.
00:09:55.780 There's some unique accessories that we have you can go look into.
00:09:58.920 Yesterday we had an event at our cigar lounge.
00:10:00.760 We have this Valuetainment cigar set with cutters, lighters.
00:10:05.020 There's so many great gifts that you can give somebody.
00:10:08.480 But you have your $25 gift card to use.
00:10:11.300 And by the way, for those of you guys that are watching,
00:10:13.200 saying it is so revealing, the report that came back.
00:10:17.580 FYI, just so everybody knows, nobody knows what the results were.
00:10:21.140 Tom doesn't even know the results.
00:10:22.420 It's driving him insane.
00:10:23.540 But I get teased a lot.
00:10:24.940 Yeah.
00:10:25.580 Brandon this morning is like, come on, tell me, where am I?
00:10:28.360 And him and Humberto are getting to him.
00:10:29.720 Well, Humberto's holding people hostage.
00:10:31.100 I don't like what he's doing, but he loves it.
00:10:33.120 He loves this kind of stuff.
00:10:34.220 If you want to see what the report results were,
00:10:37.040 we may make a one-pager, two-pager to kind of share with the audience.
00:10:41.120 If you text the word PBD to 310-340-1132,
00:10:46.380 again, text the word PBD to 310-340-1132,
00:10:51.180 that report will be sent out to the audience.
00:10:54.140 Our YouTube guy called and says,
00:10:55.800 wait you guys did a survey on your audience to ask what they didn't like and did like yes we did
00:11:01.020 nobody does this and you gave away $25 gift card how many people you spent $300,000 you said well
00:11:07.520 we weren't expecting $300,000 but it's already too late so there you have it so everybody that
00:11:12.020 completed it I want to say thank you on behalf of the team this is great intel for us on finding
00:11:16.920 ways to improve the product that we have here and without your feedback we're going to read
00:11:21.560 every single one of the pieces of feedback and some of you guys may even get a call from us so
00:11:26.300 again text pbd to 310-340-1132 we may send a video a report to you guys specifically in a text once
00:11:33.640 we have that report and some people are not going to like it but it is what it is the report was
00:11:40.060 very good for all of us if you enjoyed this video you want to watch more videos like this click here
00:11:43.860 and if you want to watch the entire podcast click here
00:11:51.560 Thank you.