Starbucks Softens ‘Stand’ On Papers

By: Allison Linn, AP Business Writer

(AP) Starbucks Coffee Co., faced with a backlash from some newspapers, is backing away from marketing deals requiring that papers stop selling at competing coffee shops or provide free advertising in return for exclusive placement at Starbucks’ outlets.

Cynthia Vahlkamp, the company’s chief marketing officer, said such plans — outlined in a letter sent to 30 newspapers a few months ago — are now being considered “talking points” intended to “get conversations going” about how newspapers and the coffee retailer can work together.

In an interview Thursday with The Associated Press, she said company officials also erred in saying that Starbucks was offering to make a partner newspaper the only regional daily available in a given store.

Other regional and local newspapers could be sold in the stores, she said, but a partner newspaper would be given higher visibility on the second shelf of the store’s newspaper stand.

The New York Times has a deal with Starbucks that gives it the top shelf of the stands, and guarantees that no other nationally circulated newspaper will be sold in Starbucks stores. The Times gives Starbucks advertising space in exchange, but doesn’t limit its newspaper distribution at competing shops.

Vahlkamp said the miscommunication was the result of “extreme shorthand” in communicating the company’s proposal.

Many newspapers balked, saying they would not pay for special placement or stop selling at Starbucks’ competitors.

John Murray, vice president of circulation and marketing for the Newspaper Association of America, said that while marketing partnerships with food and beverage outlets are increasingly common, he’d not heard of deals in which newspapers were asked not to sell at competing stores.

Newspapers were in a difficult position. Single-copy sales at retail outlets are an important source of revenue, and they did not want to be excluded from the popular Starbucks chain.

Some newspapers, including the San Francisco Chronicle, said they’d be interested in Starbucks’ terms.

“If we need to negotiate price and space, we’re willing to do it,” said Jerry Hill, vice president of circulation for the Chronicle.

Mei-Mei Chan, vice president of circulation for The Seattle Times Co., had vigorously opposed the deals, in part because her company also handles circulation for The Seattle Post-Intelligencer under a joint operating agreement. Starbucks’ proposal might have allowed one of the Seattle dailies to be sold at a shop, but not the other.

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