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Last Updated: Wednesday, 23 January 2008, 19:43 GMT
Starbucks brews $1 cup of coffee
Starbucks coffee shop
Starbucks saw its shares fall by more than 40% last year
Starbucks has confirmed reports it has started to sell a $1 (51 pence) cup of coffee in certain stores in Seattle as a trial.

But the US coffee giant said there were no guarantees that the cheap brew would be added to the menus across its outlets in the US or overseas.

Starbucks popularised luxury coffee with a price tag of up to $6.

But its business has suffered from slowing consumer spending and competition from low-cost rivals.

This test is not indicative of any new business strategy
Starbucks spokeswoman

The news had first been reported in the Wall Street Journal, which also said the Seattle-based company was experimenting with giving free refills of some of its offerings.

"We are conducting a test in the Seattle area," said a Starbucks spokeswoman.

"However, this test is not indicative of any new business strategy," she added.

Starbucks would not comment on specific details of the trial.

The firm is trying to lift its sagging fortunes, which saw its shares fall by more than 40% last year.

Coffee war

Higher dairy and energy prices have seen the firm push up prices of its lattes and espressos and many US consumers, suffering from higher bills and home loan repayments, have stayed away.

In addition, analysts warn the specialist coffee firm faces steep competition from fast-food chains, such as McDonald's, which is in the process of introducing its own line of gourmet coffee.

Starbucks sacked its chief executive, Jim Donald, at the beginning of the year and handed the reins back to its chairman and former chief executive, Howard Schultz, to steer a recovery effort.

This includes closing some US stores and slowing the pace of opening new ones.

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