Starbucks Beijing International Trade Mall closes coffee giant to deal with crisis with austerity?

Starbucks, located on the ground floor of Beijing's International Trade Mall, has officially closed down, mainly because the rent is too high to afford, according to the Economic Voice of the World Finance. The Starbucks International Trade Store, established in January 1999, is the first Starbucks store in the mainland and is located in the most prosperous commercial center in Beijing.

On June 21, Starbucks, located on the ground floor of Beijing's International Trade Mall, was officially closed, and its store staff were diverted to nearby stores to continue to work. Founded in January 1999, Starbucks International Trade Store is the first Starbucks store in mainland China. It is located in the most prosperous commercial center in Beijing. Starbucks International Trade Store carries many memories of office workers around.

It is understood that Starbucks withdrew from the first phase of the International Trade Mall, mainly because the rent was too high to afford. Some media said that the annual rent and labor costs of Starbucks International Trade Store are more than 7 million yuan. A person who selected the location of the catering industry said that the average rent of the first phase of the International Trade Mall is more than 1000 yuan per square meter per month, which is really unbearable with the profit level of the catering industry.

However, Starbucks in Beijing said that the relocation is mainly because ITC has given Starbucks a better location, that is, to enter the new store in the third phase of ITC. "it has more space than the old store in the first phase, and all kinds of facilities are also updated." Starbucks sources said that the relocation is good for the customer experience. However, it is unavoidable that the passenger flow of the third phase of ITC is obviously weaker than that of the prime location of the first phase.

Throughout the industry, a series of cases such as the closure of Shanghai Zhenning Store by Tesco and the closure of Shanghai Minhang Store by Wal-Mart reflect that the high rents of shops in the core of the city have exceeded the affordability of the shopping malls and have to be transferred to the surrounding areas. The relocation of Starbucks international trade stores also shows that the catering industry, which has a strong ability to absorb rent, is also difficult to resist the rents of shops in the core areas. In the context of economic downturn and weak consumption, high rents have become a "killer" for the healthy development of business.

Starbucks, which has been going downhill, is adopting a tightening strategy.

In 2007, Starbucks began to decline. Because of its excessive pursuit of growth, Starbucks ignores the company's operations, pays less attention to the company's core values, and pays less and more attention to the rich products, but more and more to the customer experience; the statements are getting better and better, but they are less and less aware of their mission. To make matters worse, the economy is rapidly plunging into a huge financial crisis.

Schultz ignored all kinds of suggestions at all. If compromise, although there will be a short-term return, but it will gradually erode the connotation of the brand. As the company grows, Starbucks must stick to its values, reinvest in it, and refocus on the things that made them successful, rather than taking stopgap measures. Schultz returned to the front line and personally took charge of the CEO to defend Starbucks' dream. He closed stores that blindly increased during the frenzied expansion, cut off fancy products that had nothing to do with the main business, restored the morale of his partners, and cleaned up the roots at the mission, institutional and executive levels.

In 2000, Howard Schultz stepped down as CEO to become chairman of the company. In the years that followed, Starbucks continued to expand its stores, self-confidence swelled and its share price soared. Of course, sales profits are also on the rise.

Until 2007, all this came to a standstill.

In 2007, Starbucks began to decline. Because of its excessive pursuit of growth, Starbucks ignores its operations and pays less attention to its core values. To make matters worse, the economy is rapidly plunging into a huge financial crisis.

At this critical juncture, Schultz resolutely returned to the front line and personally headed the CEO to defend Starbucks' dream. He closed stores that blindly increased during the frenzied expansion, cut off fancy products that had nothing to do with the main business, restored the morale of his partners, and cleaned up the roots at the mission, institutional and executive levels.

On the afternoon of Tuesday, February 26th, 2008, Starbucks made an unusual decision to close 7100 stores in the United States, offering three hours of espresso training for barists. to make sure Starbucks customers get the perfect cup of coffee.

The 7100 stores that are temporarily closed have the same notice:

"We are committed to making our espresso perfect. And all this comes from proficiency, which is why we devote ourselves to carving our own skills. "

Building a great and sustainable company requires a sense of the overall situation and the courage to make decisive decisions at critical moments. For Starbucks, July 2008 was the first time in 26 years that Schultz had to make a choice.

600 stores.

This is the number of Starbucks stores that have been closed in the United States, three times the number originally proposed to the board. Schultz looked over and over the list of stores scheduled to be closed: an one-month-old store in Wichita, Kansas, and an old store on Federal Road in Washington that had served customers for 18 years. Almost every major city will lose at least one Starbucks store.

Starbucks decides which stores to close based on same-store sales data. If it is calculated that it is difficult to achieve the benefits it should have, or even if it cannot turn losses into profits after improving the operating model or the economic situation, it is likely to shut it down.

However, there is one statistic that infuriated Schultz. 70 per cent of all stores to be closed were created in the past three years, and during a period of radical growth, Starbucks opened 2300 stores. This time, they will close nearly 20% of the new stores! Schultz stared at the 600 stores on the list and learned a lesson: if you see expansion as a success, then that success is bound to fail.

Starbucks' increase in the number of stores closed in the United States is part of a change strategy. Starbucks has taken a remarkable step towards improving long-term profit growth by closing about 600 underperforming stores.

Starbucks issued such a press release at 1: 05 p.m. on Tuesday, July 1, 2008, exactly five minutes after the close of the Pacific East Coast stock market. Starbucks' plan to close stores can be seen as an extension of the company's commitment to change, but some people may feel they are digging their own grave.

Now, Starbucks' austerity strategy has been extended from the United States to China.

(responsible Editor: Leo)