The displayed different coffee beans that people can smell at before making an order. For example, Project C even displays different kinds of coffee beans and lets customers smell them before purchase. Many niche brand coffee shops have their own blend or pure coffee to differentiate themselves from their competitors. Island Table Grocer Café, on Peng Chau Island. What people are seeking is an elevated touch to their coffee-sipping experience which brings out a pure, authentic coffee spirit. They don’t want to see “videos on making coffee” or “videos on coffee culture” with the brand name, but another concept of coffee: sitting in a quiet corner, peaceful music playing in the background, as the delicious aroma of freshly brewed coffee fills up the room-just like the first Starbucks store that only sold coffee beans. People are pursuing higher quality and artisan coffee. Meanwhile, another blow to Starbuck’s future might be the increasing number of new cafes across countries globally-a phenomenon that is most likely going to further weaken Starbucks’ competitive edge. The news leak further devastated Starbucks ’ image as well as its credibility. Last December, an undercover reporter had found that two Starbucks stores in Wuxi, China, were repeatedly using expired ingredients, changing expiration dates, and selling overnight food. “Starbucks’ service is horrible-rude staffs (who) refuse to help. No one could expect that Starbucks’ “arrogance” would cause so much ridicule on social media. It becomes people’s lifestyle to work or study at Starbucks and buy a cup of coffee. Starbucks is not selling the coffee, but the concept of a third space: a powerful sense of atmosphere. The reason consumers love Starbucks is the pride they take in its “coffee culture”. Starbucks’ success has been built on elegant coffee, the rich tradition behind the beverage, and customers’ sense of belonging towards the coffee chain. Fierce Market Competition Amid Emerging Niche Brand Other major coffee chains in Hong Kong, including Pacific Coffee, The Coffee Academics, and NOC, have yet to pass higher costs on to their consumers. The company said, “We seek to minimise any price increases for our customers, but there are many factors that contribute to our pricing decisions, which we need to take into account.” In a statement from Starbucks Hong Kong, the company said it had purchased coffee 12 to 18 months in advance to ensure adequate supply for its roasting plants and thereby reducing pricing volatility for its customers. The Coffee Futures’ price has climbed to the highest point over the past 10 years. The current price of coffee futures has hit the highest price in nearly ten years. The main factor of the price rise is the surge in the cost of coffee futures. Starbucks had already announced it would further ramp up prices in 2022 to offset soaring costs due to increasing inflation, supply chain disruptions as well as rising labor costs-prompting the decision to raise its coffee prices globally. A cup of venti Salted Caramel Cloud Macchiato sold at HK$53. The menu at a Starbucks store at On Ning Ln No.1, Sai Wan. Starbucks also increased the price of most handcrafted drinks by HK$2 a cup in Hong Kong earlier in September 2021. The price adjustment on February 16th is the second price increase in the past four months in mainland China. “Starbucks is already quite expensive, and if it (the price) goes up any more, it’s going to be a bit painful,” said Gillian Ji, a student from the University of Hong Kong. (Photo from ) Rising Cost Due to Supply Chain Disruption Starbucks’ 2022 first-quarter press release showing its dropping store sales. Starbucks reported a 3% decrease in its international sales and a 14% decline in sales in China in the first quarter of 2022. It is even a tiny number in comparison to China, where Starbucks has already opened 5,500 stores in over 200 cities.Īlthough Starbucks has been taking a prominent market space, it has run into profit stagnation since the fourth quarter of 2021. (Photo from )Īccording to the Hong Kong Professional Coffee Association, there are about 250 independent coffee shops in Hong Kong, with Starbucks taking the lead in being the largest chain in the city with over 170 stores. Shops 308-310, 3/F., Exchange Square Podium, Central. The first Starbucks store in Hong Kong is located in Exchange Square, Central-the heart of Hong Kong’s most vibrant trading hubs. Starbucks, the largest coffeehouse chain in the world, was founded in 1971 in the U.S. Starbucks’ recent price rise has triggered a crisis amid fierce global competition and emerging manual pore-over coffee culture. A one-dollar price increase for a cup of Starbuck’s Grande Americano last week sparked an online uproar in China, shedding light on Starbucks’ hidden troubles under its superficial prosperity.
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