Why are fewer and fewer people going to Starbucks in China? Why is Starbucks coffee so expensive?

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Today, many netizens on Weibo are discussing such topics as why fewer people go to Starbucks in China and why Starbucks sales are declining in the Chinese market.

According to Starbucks' first quarter 2023 results released in February, Starbucks' global same-store sales rose 5% year-on-year in the first quarter, while same-store sales in China fell 29% year-on-year. For such data, there are Wall Street analysts, China's first-quarter results as Starbucks' second-largest market are clearly "dragging its feet".

For analysts' comments, Howard Schultz, interim CEO of Starbucks, said that the decline in sales in China was due to restrictions on the movement of people related to the epidemic and the sharp rise in the number of COVID-19 infections after the zero clearance policy was cancelled, but the final data did exceed their expectations by as much as four times. Is the decline in Starbucks sales in China really only due to the impact of the epidemic? According to the current netizens' discussion, the epidemic is only a "mending knife", and its own operation and management seems to be the root of the problem.

People go to Starbucks less and less, and the reasons given by mass consumers probably revolve around these points: "the arrogance of crisis public relations has reduced the consumers' preference", "the service experience is getting worse and worse", "the products are not delicious without any innovation", "the product is less cost-effective, and there are more and more other coffee choices", "the economy is bad, and people's consumption has dropped."

"the arrogance of crisis public relations has reduced the popularity of consumers." last year, Starbucks stores rushed to eat in the outdoor dining area. Starbucks China's handling process accelerated consumers' loss of goodwill to the brand. The main reason is that in the face of the occurrence of the matter, whether or not the process is as stated in the police statement, if the fact is that it does happen, the people's anger will not be that high if they apologize and show their attitude in the first place through sincere words.

However, when dealing with this matter, Starbucks tends to use facts to prove that it is "not wrong" in the first place, thus ignoring the negative emotions of public opinion. At the same time, it did not deal with the negative impact in time, so that this matter has become the criticism of consumers, resulting in more and more people to reduce the popularity of the brand. The "worse and worse service experience" epidemic has led to a rise in Starbucks' operating costs, with people in almost all stores "compressed" to the limit and employees becoming more and more versatile. Some general business stores have only one employee + one management. When there is only one person operating in multiple positions, it is not easy to ensure the production speed, and can not take into account the customer's consumer experience.

So much so that it falls into such a cycle: the decline of guest consumption experience = reducing the number of repurchases = sales deficit = higher and higher operating costs = reducing operating costs = customer consumption experience continues to decline. "products fried cold rice, without any innovation" observation in many regions of Starbucks new products can be seen in the Chinese market beverage innovation is more or less conservative. In other regional markets, people launch new products for every theme marketing, and there is little repetition. Even if there is repetition, it will only be regarded as the return of classic products, and then put on the shelves with other new flavor R & D products.

On the other hand, the new products of Starbucks in China are either intact or new products are launched, and their tastes are more or less the same, which is nothing attractive to consumers who like novel things today. at the same time, it does not "hit" the expectations of most consumers for taste.

"the product is less cost-effective, and there are more and more other coffee choices." A large cup of drink usually needs to start in the 30s or 40s. Even if relevant coupons are launched, they are not attractive to the public in taste. Consumers do not have much idea of continuing to repurchase the taste of the product. For the taste part of the classic product / previous theme product, consumers will gradually position the brand and product to a low performance-to-price ratio.

The rapid rise of other domestic coffee brands + taste innovation + people-friendly prices, as well as the epidemic for three years, people work from home, have bought a variety of coffee products online to brew their own, thus reducing people's attention to Starbucks. "the economy is bad, people's consumption has declined." in recent years, domestic milk tea brands and coffee chain brands have risen rapidly, with fast innovation in price and taste and low prices, so that Starbucks' once major white-collar customer group has changed to other affordable products. Starbucks coffee is seldom dried on everyone's social platform, and more is the new flavor of milk tea. Some netizens also said that in the past, when drinking coffee at Starbucks, the next table was holding a computer and holding a conference call, talking about brand strategy and mission vision. Every time they heard it, they felt that they were too small to gossip loudly next door. What I hear when I go to Starbucks now is how to pay social security in the future, how to guarantee old-age pension in the future, whether this generation can still get a pension, and so on.

As can be seen from the netizens' reaction, what Starbucks needs to consider may not be to accelerate the sinking of the market and the opening of stores, but to focus on the operation of existing stores. Correspondingly increasing the cost of store operation and manpower may be the key to change.

Although accelerating the sinking of the market is a way for Starbucks to gradually lower its profile and get close to mass consumers, there are many choices for coffee and coffee shops nowadays. If even the proudest third space can not be better maintained, it may still be difficult to regain consumers' trust in the brand. Photo Source: Internet

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