Why Did the First Starbucks in Shaoxing Close After a Decade?

In February 2024, Shaoxing’s very first Starbucks — the landmark store on Jiefang Road — served its final cup of coffee just before midnight on February 28. For regulars who had spent years meeting friends, dating, or simply enjoying a quiet moment in this café, the news of its permanent closure was met with disbelief and nostalgia. But beyond the sentimental value, the shuttering raises larger questions about what’s happening to traditional coffee retail in China.

The short answer? The store’s 10-year lease expired, and the new landlord demanded a higher rent than Starbucks was willing to pay. With no deal in place, the global chain chose not to renew. Though discussions are underway for a potential relocation nearby, nothing is confirmed yet.

The Final Night: A Community Says Goodbye

On that last evening, the store remained open until 11 p.m., hosting a heartfelt farewell. A “thank you” event was held in the basement for loyal customers and former staff, including several past store managers. Around a dozen regulars joined in, sharing stories, playing games, and reminiscing over what the location meant to them. One long-time customer recalled driving through a snowstorm in 2008 to pick up employees unable to make it to work. Even as the mood turned bittersweet, some speculated — though unofficially — that a new branch might open nearby within months.

Why the Lease Didn’t Renew: Rent and Real Estate

Starbucks’ Shanghai headquarters confirmed the closure was due to the expiration of the original 10-year lease signed with developer Successor Group, parent company of the property owner, Xilinmen. Over time, parts of the building were sold to individual landlords, including the unit housing the Starbucks. The new owner raised the rent significantly, prompting the coffee giant to decline renewal. Eventually, the property was taken back under centralized management, but by then, the location had already been lost. While no exact rental figures have been released, industry insiders suggest rapidly rising commercial rents in central Shaoxing made the site unsustainable for Starbucks' standard business model.

The Bigger Picture: Coffee Shops in Decline

The demise of Shaoxing’s pioneering Starbucks is not an isolated event. Since the early 2000s, many Western-style coffee chains and cafés — including Taiwan-based brands like , , , , and — once flourished as symbols of modernity and romance. Yet over the past decade, most have disappeared. Locals report increasing difficulty finding a decent café nearby, with many having to travel to newer commercial zones like Lu Xun’s Former Residence area or shopping malls such as Shimao Plaza and Intime City. The shift reflects broader challenges facing traditional coffee retailers.

What’s Really Driving Coffee Shop Closures?

Industry sources cite several key factors:

• Rising rents and property costs that make small or mid-sized cafés unprofitable.
• Increased competition not just from other cafés, but also from fast-food chains, bubble tea shops, and convenience stores offering coffee.
• Changing consumer habits — younger demographics often prefer trendier, more specialized venues or mobile ordering options.
• Many so-called coffee shops now focus on selling tea, snacks, or even alcohol, with coffee taking a backseat.
• Shifting commercial districts pulling foot traffic away from older urban cores.

One café owner who recently took over a 150-square-meter shop calculated she needed to sell 60 cups of coffee per day at ¥15 each just to cover annual rent (¥100,000), renovation costs (¥150,000), and a ¥100,000 transfer fee — a target most cafés struggle to meet consistently.

Has American Coffee Culture Lost Its Shine?

Starbucks wasn’t just a coffee shop — for many Chinese consumers, it was a symbol of Western lifestyle and modern leisure. Alongside KFC, McDonald’s, Coca-Cola, and Pepsi, it represented an aspirational slice of Americana. In its heyday, opening a new Starbucks on Jiefang Road drew crowds and signaled urban sophistication. But today, that allure is fading.

Several cultural shifts contribute:

• Health-conscious consumers are wary of high-calorie fast food and sugary drinks, once considered novel but now seen as excessive.
• Concerns over food safety and supply chain transparency have eroded trust, even in well-known brands.
• The “premium experience” promised by these brands hasn’t always materialized equally across global markets, leading to disillusionment among local customers.
• As consumers mature, the novelty of Western brands wears off, and expectations shift toward authenticity, value, and local relevance.

Starbucks’ consistent brand image may have dulled its once-exciting appeal, especially as specialty coffee culture grows and consumers seek more unique, quality-driven experiences.

Frequently Asked Questions

When did the Shaoxing Starbucks on Jiefang Road close?

The original Starbucks in Shaoxing, located on Jiefang Road, officially closed on February 28, 2024, after operating for ten years. The store stopped serving customers at 11 p.m. that night.

Why did the Starbucks in Shaoxing close?

The store closed because its 10-year lease expired, and the new property owner raised the rent significantly. Starbucks chose not to renew the lease under the new terms. The location was originally leased from Successor Group, part of Xilinmen, which later sold parts of the building to individual landlords.

Will there be a new Starbucks in the same area?

Starbucks’ Shanghai headquarters has confirmed they are in talks to find a new location nearby, but no official announcement has been made. Some online rumors suggested a new branch might open in Xianheng New World Plaza within three months, but management at that location has denied any such plans.

How much did rent and costs impact the closure?

While exact rent figures were not disclosed, industry sources indicate that commercial rental prices in central Shaoxing have risen sharply, making it difficult for traditional coffee shops to maintain profitability. One café owner calculated needing to sell 60 cups daily at ¥15 just to cover basic costs, a target many struggle to achieve.

What was the significance of this Starbucks for the local community?

As Shaoxing’s first Starbucks, the Jiefang Road location was more than just a café — it was a community hub where residents celebrated milestones, met friends, and experienced the “third place” concept central to Starbucks’ global brand identity. Its closure marks the end of an era for many long-time customers.

Are coffee shops in general struggling in Shaoxing?

Yes, according to interviews and industry observations, many traditional coffee shops and Western-style cafés have closed in Shaoxing over the past decade. Competition, shifting consumer habits, rising commercial property costs, and the movement of foot traffic to newer malls have all contributed to the decline.

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