Logged Users (last hour): 11
Registered Users: 227,179

2013 Jun 9 Beijing's First Starbucks Booted Out by High Rent

The rent is too high on this place

A rumor has started on Weibo that the first Starbucks to open on the Chinese mainland can no longer afford to pay rent. Influential finance blogger Jinrong Bagua Nu (金融八卦女) tweeted on her Weibo account this morning that the successful Guomao World Trade Center store, which opened in the late '90s, is not making enough profit to stay in the location. An increase in rent is forcing the branch to close or relocate.

For the past decade, the store has been jammed with wealthy white collar workers splurging to refill on sugar and caffeine. Starbucks' success in China surprised many, as until recently China had no coffee-drinking tradition, and there were initial doubts whether the Chinese would take to cappuccinos and lattes. But last year, riding on success, they raised drink prices by RMB 2, bringing the price of a tall latte up to RMB 27. In this year's second quarter, the company’s revenue in the region was USD 213.6 million, a 22 percent increase over the first quarter.

And the company continues to expand the scope of its offerings in China. A newly opened store in Beijing’s Oriental Plaza is testing a new model, serving freshly cooked dishes like beef lasagna and cream of mushroom soup.

So why can’t they afford to pay the rent? Either the property market in this city has gone from silly to insane or someone got the story wrong. This particular location is notorious for being crowded and seating limited. Slow turnaround on drink sales may be one of the factors affecting its ability to generate enough revenue.

The manager of the Guomao branch was not available for comment this morning and employees refused to make any statements. Still, users on Weibo have plenty to say.

Some netizens speculated if the closure is due to rent at all and said the branch was just moving. Most complained about the stupidly high rents businesses face in Beijing. An editor for retail web portal Linkshop.com, Zhu Zhenjia, warned more and more stores will be forced to move or close as more leases are beginning to expire.

Two months ago, Beijing’s second oldest McDonald’s branch was also forced to close, leading to an outpouring of emotion from netizens. And the city’s housing bubble has hurt us all at one point or another with apartment rental prices going up by 150 percent in the past decade.

Photo: Starbucks.com

BumbleBeeTou's picture
Offline
Joined: Feb 14, 2008
Posts: 200

Another BS headline by TBJ? Shocker!

When exactly did Wester let TBJ become such a tabloid?

Hasn't TBJ learnt anything from its recent experiences with running articles that have zero evidence to back them up?

:?

You might also be interested in :

June 6 is Dragon Boat Festival, the Chinese holiday where everybody eats zongzi, the pyramid-shaped dumplings made from glutinous rice and assorted fillings. Every year around this time, the Chinese media churns out articles about “luxury zongzi,” bemoaning the fact that the traditional holiday food has become a mere vehicle for abalone, bird’s nest, truffles, Wagyu beef and obnoxious nouveau riche wealth-display.

We agree. If you must tinker with this classic rice dumpling, there are better ways to do it than simply throwing expensive ingredients at it.

 

Mid-autumn festival is coming up, bringing cooler weather – let’s hope – and, of course, mooncakes. The staple gift/ personal treat for the festival can be found in any Chinese shop or supermarket, but there are plenty of other options if you’re looking for something less traditional. Just grab those vouchers before they all sell out.

Coffee, in case your wits are too inert to notice (go brew a pot right this second) has reached its tipping point in China. Starbucks has been here for over two decades, but only lately has it found serious traction, expecting to triple its stable of 500 stores over the next three years.

As the Chinese coffee market diversifies, companies are scrambling to find their niche. Not only is this heralding the arrival of the latest American coffee trends (organic, “farm-to-cup” and microroasting) but the emergence of weird and wonderful new retail models that cater to the demands of the local market.

 

It’s time for that densest of Chinese cultural treats: mooncakes. Comedian Johnny Carson once said, “The worst gift is a fruitcake. There is only one fruitcake in the entire world, and people keep sending it to each other.” Doesn’t sound too far off from some of our mooncake experiences, right?

Luckily, folks in Beijing know how to liven things up. In our three-part blog series, we’re telling you where you can get your hands on mooncakes actually worth eating. Part 1: The Good is all about the trendy “updated” ones that look like mooncakes but don’t taste like them. Part 2: The Trad(itional) will give you your pick of the fancy-schmancy gift boxes around town, and Part 3: The Ugly will show you what happens when we try to make them ourselves.