Every 9 hours open a new store, Starbucks is anxious?

One week, Starbucks will usher in 6,000 stores in China.

In the past ten years, Starbucks has increased by nearly 10 times in the number of stores in Mainland China, and the Chinese market has also become the second largest market after the United States.

However, hidden concerns behind good news.

Starbucks announced in the third quarter of the fiscal year in FY2022 showing that Starbucks China ’s revenue was US $ 540 million, a year -on -year decrease of 40%. Under the influence of the passenger flow decreased by 43%and the average unit price dropped by 1%, the sales of Starbucks China ’s same stores fell by 44%.

At the same time, the number of Chinese local coffee brands Ruixing also exceeded Starbucks. This is something that Starbucks has never had before entering China for 23 years.

In the face of the competitors of competitors, Starbucks couldn't sit still. At the global investor exchange meeting held recently, Starbucks proposed the "2025 China Strategic Vision": In the next 3 years, Starbucks will open 3,000 new stores to 300 Chinese cities at a speed every 9 hours.

A radical goal

3,000 stores in 3 years, this is a very radical goal.

You know, in the past two fiscal years, Starbucks China has only increased 580+ home stores and 650+ home stores respectively. On average, 1,000 news are opened a year, which is equivalent to an increase of more than 50%on the basis of previous.

From the perspective of the outside world, Starbucks is an important measure to defend its dominant position in the Chinese market. Since opening the first store in Beijing in 1999, Starbucks has been in the top of the coffee market in Mainland China. In 2017, its market share in China reached 51%.

However, in recent years, Starbucks's development in the Chinese market has not been smooth. In the third fiscal quarter (April 2022-June 2022), Starbucks China revenue was US $ 540 million, a year-on-year decrease of 40%. Affected by the decrease of passenger flow by 43%and the average unit price of 1%, Starbucks China ’s sales fell by 44%. This is also the decline in sales of Starbucks China in four consecutive fiscal quarters, and the decline has expanded from 7%to 44%.

Starbucks China's development in recent years has not been smooth. Photo by China News Agency, Zhongyan Ming

Senior chain operating expert Wen Zhihong told China News Weekly that the reason why Starbucks' performance declined was due to the epidemic. Starbucks's stores are mainly located in my country's first and second -tier cities. In the first half of this year, Starbucks and other Starbucks towns such as Beishang, Guangzhou and Shenzhen all had different degrees of epidemic.

Starbucks China told China News Weekly that in the third fiscal quarter of 2022, more than 1,300 (nearly a quarter of the total stores) stores were in a state of temporary closing stores. At the end of this quarter, about 2,000 stores in nearly 50 cities need to reducing the opening of the canal seats or implementing other restrictions in accordance with the requirements of epidemic prevention.

"On the other hand, Starbucks is being surrounded by Chinese brands, especially from Ruixing's challenges. Even in the number of stores, Ruixing has surpassed Starbucks." Wen Zhihong pointed out.

Data show that as of the end of 2021, the total number of Ruixing Coffee stores has reached 6024, exceeding Starbucks with a total number of stores with a total of 5,557, and has become China's largest chain coffee brand.

In the first half of this year, the scale gap between the two was further widened. As of the end of the second quarter, Starbucks China had 5,761 stores, and the number of Ruixing stores was 7,195.

In addition, new coffee forces such as Manner and Seesaw and tea brands such as Xixue and Naixue are also competing for the coffee market.

However, in the opinion of Wang Zhendong, chairman of Shanghai Mart -Vietnam Coffee Co., Ltd., Starbucks is more at this time to focus on the growth and space of the Chinese coffee market in the future.

Earlier, Starbucks has announced that from fiscal year to fiscal year 2025, it plans to achieve 7%-9%of the same store sales growth (higher than the previous 4%-5%) each year, and the annual global income will reach 10 10 %-12%growth (higher than the previous 8%-10%).

With the gradual saturation of the US market, the Chinese market is highly hoped. Starbucks plans to increase the number of global net new stores from fiscal year to 2025. It will reach 7%. In this regard, the target of the US market is 3%-4%, and the Chinese market will reach 13%.

At present, China is Starbucks the world's second largest market. Starbucks's fiscal year 2021 shows that the Chinese market contributes 12.7%of Starbucks worldwide, second only to the US market. But this market still has huge potential. Wang Jingying, chairman of Starbucks China, said that looking at the entire coffee market in China, it is still in the early stage of development and the market potential is huge.

According to the 2022 China -grinding coffee industry research report released by iResearch, the size of the Chinese coffee market in 2021 was about 87.6 billion yuan, compared with the growth rate of 38.9%in the previous year. The size of the coffee market is expected to reach 190 billion yuan. Most of China's coffee chain brands and stores are mostly concentrated in the southern market and high -level cities. There is still much room for penetration in the sinking market in the northern and central and low -tier cities.

In the first quarter of Starbucks's financial report conference call, Howe Schultz, the founder of Starbucks, even said that the business in the Chinese market will be larger than the US market in the future.

Fierce competition market

But it is not easy to achieve this goal.

On the one hand, scale expansion is bound to require huge costs, which will test Starbucks's cash flow. Data show that Ruixing's fast-picking stores of 20-60 square meters account for 92%, and most of the fast-picking stores only need less than 3 clerks. The first store founded in 2015, the average area of ​​its stores is only 10 square meters. Instead of viewing Starbucks, due to the "Third Space" experience, it has high requirements for stores and area and location. Generally, it is 150-300 square meters, and most of them are located in the core business district. In addition, 5-6 employees need to be configured. This also means more expensive rents, water and electricity costs and more personnel expenses.

In order to pursue the concept of "third space", Starbucks stores have high requirements for area and location. Photo/China News Agency to Anton Photo

In addition, Starbucks has only one model in the Chinese market. Although it ensures a unified store style and product quality, it has further increased the cost of expansion. These factors will affect Starbucks's expansion speed.

And with the change of consumption habits, the importance of stores is continuing to decline.

Wen Zhihong pointed out that the emergence of takeaway and the normalization of epidemic prevention and control have changed people's coffee consumption habits. "The expansion of the omni -channel has become an important direction for the coffee market innovation." A report released by Deloitte last April showed that compared with the initial drinking coffee, the proportion of "fast coffee" consumer scenarios has been from 53% from 53% Ascend to 70%.

Compared with the cost of opening a store, it is more worried about consumption shrinkage.

National statistics show that the total retail sales of social consumer goods in the first half of the year were 21043.2 billion yuan, a year -on -year decrease of 0.7%. Among them, according to the type of consumption, the retail sales of goods were 19039.2 billion yuan, an increase of 0.1%; catering revenue was 2004 billion yuan, a decrease of 7.7%. The decline in the catering industry exceeds the overall decline of the community.

And due to uncertainty about future income, young people's sensitivity to coffee prices has increased, and it pays more attention to cost -effectiveness when consumption. People's Daily Public Opinion Data Center and People's Online Release "2022 Local Coffee Consumption Trends Insight Report" shows that the current coffee price range that consumers can accept the most acceptable coffee is 16-25 yuan, of which consumers who have visited the current coffee are both affordable , And quality, pursuit of cost performance gradually becomes their mainstream consumption option.

According to Starbucks's latest menu, there are currently 84 models of drinks (including coffee fusion ice cream), of which only 9 are less than 30 yuan and 75 products with more than 30 yuan, accounting for 89%. In contrast, local brands must be much more affordable in terms of price. Ruixing is mainly concentrated in the 20 yuan price belt. Most coffee launched by tea brands does not exceed 20 yuan.

The tea industry that is quite similar to coffee earlier noticed the changes in the consumer wind direction earlier. Earlier, the high -end Nai Xue and Xisha tea have been aimed at the terminal market of less than 20 yuan in the first half of this year. The price of its products has been lowered. At present, there are no drinks starting from 3 words.

In addition, the layout of Starbucks's stores in first- and second -tier cities has been relatively complete, and the market saturation is relatively high. Opening 3,000 stores means to sink further. However, whether the consumption power of the sinking market can support the price of Starbucks, it still needs to make a question mark.

While Starbucks proposed the expansion plan, "cost reduction" is becoming the consensus of the catering industry. Nai Xue, who has been singing high for many years, has slowed down the store opening speed in the first half of this year. As of June 30, 2022, Naixue had a total of 904 stores and 87 new stores. This data is not only lower than the 326 newly added throughout the year last year, and it is far from the goals of 350 this year. Haidilao also released the "Woodpecker Program" at the end of last year, which permanently closed 260 Haidilao restaurants, and 32 restaurants temporarily suspended business.

Wang Zhendong said that if you want to add 3,000 stores in the next three years, Starbucks needs to adjust and break through the business model, and there may be more product lines and more younger to increase the penetration rate of the sinking market.

High premium is unsustainable

However, can you solve all problems when opening a store? In this regard, Wang Zhendong analyzed China News Weekly that for Starbucks, the expansion of Guangdian store is obviously not enough. The core is to enhance the product power.

In fact, Starbucks has gradually caught up from far ahead to being caught up, and behind it is a huge change in Chinese coffee culture. Coffee was originally a "imported product". Before domestic coffee developed, Starbucks was synonymous with coffee. However, with the rise of local coffee brands, coffee is becoming more and more tea.

Starbucks' product power needs to be improved. Picture/China News Agency sent by Chen Yuyu

"Compared with Europeans and Americans, they are more willing to drink traditional coffee products such as American and Latte. Chinese coffee culture is more compounded and affected by tea culture. Chinese consumers prefer to drink flavored coffee." Wang Zhendong pointed out. Many of the major coffee brands that Ai Media Consultation and statistics are hot -selling products with sweet tastes, such as Manner's osmanthus latte or Ruixing's raw coconut latte.

In contrast, Starbucks' innovation ability seems to be slightly inferior. Observing Starbucks's menu can be found that 30%are traditional coffee products, 30%are Star Bingle and various special drinks, and 20%are the traditional models of food and surroundings.

In this regard, Wen Zhihong said that Starbucks has insufficient innovation capabilities and is inseparable from its brand tone. "Starbucks is a global chain coffee shop. Based on such brand positioning, the product structure is relatively needed to maintain its stability and consistency. Ruixing is a local emerging brand. Historical burden. "It is worth noting that in the face of the above issues, Starbucks is doing targeted deployment.

In the "2025 Vision", Starbucks announced that the "Starbucks Coffee Creative Park", which invests about 1.1 billion yuan, will be completed and put into operation in Kunshan in the summer of 2023. At that time, Starbucks will complete the land coverage of the entire industry chain from raw beans to coffee.

Starbucks told China News Weekly that Creative Park includes the largest coffee roasting factory outside the Starbucks US market, which can roast 135 million pounds of coffee per year. In addition, there are highly automated, intelligent logistics centers covering an area of ​​33,000 square meters, and an immersive experience center for the public.

Wen Zhihong said that the supply chain's land can further reduce the logistics costs and production costs of enterprises, enhance the production coordination capabilities of the enterprise, and enhance the competitiveness of the product market.

Wang Zhendong further pointed out that the supply chain achieves localization of localization. The advantage is not only reflected in cost control, but also helps to improve Starbucks' innovation. "In the past, Chinese consumers had a lot of criticism for Starbucks to have a heavy smell of smoke, so can we now adjust the roasting degree of coffee beans according to the national conditions of China?"

In addition, Starbucks also plans to expand omnichannel services.

Starbucks plans to achieve the goal of the current performance of more than double the current performance by 2025. At the same time, with the help of e -commerce channels, it will contribute to coffee coffee goods and gift business. By 2025, the sales performance of its e -commerce channels is expected to continue to expand with a compound annual growth rate of 30%.

Starbucks China hopes to meet consumers' coffee needs in various life scenes in the next three years. "By 2025, the current 2,500" Starbucks Coffee Service "points covering office buildings, hotels and other places will double to 5,000. Starbucks drinking coffee will also enter 5.5 million merchants and convenience stores, and other channels The business forms a joint force to enhance the brand awareness and market penetration. "

Wang Zhendong pointed out that fundamental speaking, Starbucks needs to re -evoke consumers, especially young people's identity of themselves. In the past, the high premium of Starbucks was the concept of the "third space" it admired. However, when the consumer demand continues to be transferred to the online, young people do not perceive the so -called "third space". At this time, the high premium will be difficult to sustain, and consumers will naturally decrease by consumers' identity in Starbucks. "Therefore, how to create a new added value is an important step for Starbucks's self -innovation."

Reference materials:

Coffee's "Sinicization" transformation, First Financial Magazine, 2022-3-23

Starbucks, who has been lying for 10 years, has to roll a volume, leopard changes, 2022-09-20

The father of Starbucks is holding the coffee empire, it is difficult for old coffee to lower Chinese new coffee, Snow Leopard Finance Society, 2022-04-18

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