I didn't lose my heart but I lost to the rent! Where should traditional coffee chains such as carving time go?

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Recently, carving time announced that the Wudaokou store in Zhongguancun, Beijing, had been officially closed due to rent pressure, which made the already restless coffee track make waves again. In fact, as the first generation of domestic coffee brands, carving time felt the threat from cutting-edge brands such as Zhongguancun 3W Coffee and Garage Coffee several years ago, and now it is not surprising that it is going into recession.

The local coffee brand, which was founded in 1997 and sprouted in China earlier than Starbucks, can be called the veteran of domestic ashes-grade coffee. It was once known as "Chinese Starbucks" and has gained countless loyal fans. Although carving time still has dozens of chain cafes in operation across the country, Wudaokou, a landmark store in Beijing, will not finish its journey in such a way after more than a decade of presence, and the financial pressure behind it can be imagined.

As the carving time openly admitted, although Wudaokou was originally a "village" in Beijing. However, with the expansion of Chengfu Road, the nearby culture and trade industry has developed rapidly, especially after the establishment of the "Wudaokou Station" on Metro Line 13, this area is becoming more and more prosperous. In a trance, Wudaokou has become what people call the "center of the universe": the Yusheng Building has sprung up, there are more and more Internet companies in Tsinghua Science and Technology Park, and the house prices of Huaqing Jiayuan are like sitting on a helicopter. Wudaokou store rents are rising faster than expected year after year.

"the rental contracts of the carving time Wudaokou store were all signed once every six years, so it has been going smoothly for more than a decade. From 2016, the contract has been changed to once every three years, but the high rate of increase year by year makes the Wudaokou store really unaffordable, and it has increased by nearly 50% this year. 20% of the staff cost, 40% of the rent cost, not counting raw materials and utilities. " The carving time is so frank. In the end, the carving time Wudaokou store was fixed on a paper seal of the people's Court of Haidian District of Beijing due to arrears of rent. After all, feelings lost to reality.

In fact, this is a microcosm of the closure of many cafes in China in recent years. The cost of rent has long been an unbearable burden for cafes to "shine their ideals into reality". It is just that the carving time can not escape this bullet after all, which inevitably leads to more sorrow in the industry.

Of course, rent is not the only reason why carving time Wudaokou stores are crushed. Carving time in the past few years because of their own poor management, more and more franchise stores across the country have applied to withdraw, and lawsuits have continued. Celestial eye examination shows that there are 4 peripheral risks and 19 self-risks.

It is reported that the landlord of the carving time Wudaokou store is a neighborhood of the former Beijing University store, but it has also been sued for continuous arrears of rent, and the main store, Weigong Village, was closed for a time because of arrears of rent.

Industry insiders believe that it is not known whether the company's capital and operational pressure exposed by the closure of Wudaokou stores will cause a domino effect. But there is no doubt that carving time is suffering from multiple challenges such as more fierce market competition and more complex environmental changes. Behind this is the great impact of the traditional business model of coffee represented by the carving time in the new retail tide. In other words, carving time is not lost to time, but may be lost to this era.

In sharp contrast to the carving time, Luckin Coffee announced that he would be stationed in 18 large and medium-sized cities, including Shijiazhuang, Shenyang, Guiyang and Zhuhai, by the end of April. At that time, the number of cities in the country will reach 40 for this new retail coffee brand that has only been in the new market for just over a year. Sadly, even if there is controversy, this is the only local coffee brand in China that openly challenges Starbucks and quickly enters the first echelon.

It is undeniable that as the existence of two phenomena in China's coffee market, Lucky and carving time represent the alternation of the old and new forces of China's local coffee respectively, behind which is not only the continuous iteration of China's coffee market, but also the full outbreak of dividends in China's new retail coffee market.

(integrated from: daily Economic News, Economic Daily, Pinway Business Review)

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