Starbucks has expanded its stores by 70% in five years; does rapid expansion affect brand image?

Recently, COSTA, another coffee chain active in the Chinese market, also announced its expansion plans. It is reported that COSTA has 1106 stores in 29 countries around the world. Among them, on the basis of 344 stores in China, it is planned to reach 900 stores by 2020, with an average of one store every three days.

Compared with the layout of COSTA in China, Starbucks will open 500 stores in China in each of the next five years, and such a large-scale expansion plan is undoubtedly particularly bold.

Therefore, there is a view that if the expansion continues at this rate, both human, material and financial resources will be no small challenge for Starbucks. With the rapid expansion of Starbucks, Starbucks stores may appear in the streets of various cities, and the phenomenon of rotten streets will also be serious, which will affect the brand image.

In fact, throughout the development of Starbucks, the industry is not unreasonable to be so worried.

According to reporters at Rule of Law weekend, as early as around 2002, when Starbucks had higher requirements for performance growth, Starbucks began to expand its stores, and the company's stores tripled in five years. However, due to the excessive pursuit of growth, Starbucks neglected its operation, which worsened the customer experience and slowed the growth of store transactions. In order to return to the trend of rapid growth, Starbucks closed stores that blindly increased during the frenzied expansion period, cut off fancy products that had nothing to do with the main business, returned to the main business of coffee, and improved the quality of goods and services.

But Starbucks is not worried. "Starbucks came to China in 1999 and only opened 1500 stores in 2014. In fact, our development in the Chinese market in the first decade or so has been particularly sound, and we have made preparations in all aspects. Therefore, we have made some sound arrangements according to the current market demand. I believe that Starbucks will usher in a peak of development in the next four and five years." The head of Starbucks said.

"for a multinational company like Starbucks, it is relatively experienced in managing more than 23000 stores in more than 70 countries around the world, and it will be fine if it is well prepared." The person in charge further said.

Hu Lu agreed, saying: "after decades of growth, Starbucks has a very mature management system. These risks are completely preventable and there are many things that local coffee companies can learn from."

Have a great impact on local brands

In Li Junping's view, Starbucks' large-scale expansion will further consolidate Starbucks' absolute leadership position in the Chinese market and further distance itself from other competitors. the intention is to bring a kind of coffee to Chinese consumers, that is, "Starbucks" consumer image, so as to enhance its brand image. However, this large-scale expansion of Starbucks is bound to alert industry competitors, especially the main competitors Shangdao Coffee, Man Coffee and COSTA are bound to take corresponding action strategies to deal with Starbucks' expansion.

Hu Lu, vice president of Yunnan Coffee Industry Association, also said that with the improvement of domestic consumers' recognition of coffee, especially in the past five years, in addition to Starbucks, many foreign coffee brands have also flocked to the Chinese market, which will have a great impact on local coffee brands.

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473