Why Is This Arabica Coffee Store in Xiamen Closing?

Manner Coffee's first Xiamen store, inside MixC, is set to close when its lease ends. The shop opened in March 2021 as the brand's entry into the Xiamen and Fujian markets, and people familiar with the matter say the contract expired at the end of last year and was extended for only half a year.

A second Manner MixC store has already opened nearby, so regular customers can still buy coffee and baked goods. The closure reflects both the mall's business format planning and cost pressure from rent and utilities, the kind of trade-off brands face when they open an arabica coffee store in core business districts.

Manner Coffee's first store in Xiamen's MixC is about to close. This store, which opened in March 2021 and has been operating for three years, was Manner's starting point for entering the Xiamen and even Fujian market. According to people familiar with the matter, the store's contract with the mall expired at the end of last year and was only renewed for half a year. Now the renewal period is about to end and there is no intention to continue, so the closure is a foregone conclusion. However, Manner has already opened a second MixC store nearby, and regular customers can still go to the new store. Behind this adjustment are both factors related to the mall's business format planning and possibly cost considerations brought about by rent changes. Although opening stores in core business districts can bring foot traffic and visibility, high rents, utilities, labor and other costs also force brands to weigh the pros and cons.

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Recently, a netizen posted on social media that Manner's store in Xiamen MixC is about to close. This store has quite a background - in March 2021, Manner entered the Xiamen market for the first time through it, and it was also the brand's first foothold in Fujian, having accompanied local consumers for more than three years. The store has an open space and ample natural light. It not only sells coffee but also offers light meals such as baked bread, thus accumulating a considerable number of loyal customers, and nearby office workers often treat it as a breakfast spot.

A person familiar with the matter said that the lease between this Manner store and the mall actually expired at the end of last year, and after negotiation between the two parties it was briefly extended for half a year. Now that more than half a year has passed, the store seems to have no intention of renewing again, so after the contract period ends, Manner's first Xiamen store will officially close. For customers who like Manner, if they want to continue drinking coffee and buying bread, they can conveniently switch to the recently opened Manner MixC Second Store.

For local Manner fans, the second store is like a substitute that can step in at any time, and regular customers' consumption experience will not be greatly affected. They can still buy familiar coffee and baked products. However, some users who care more about the store environment have some thoughts about this closure and relocation. They do not quite understand: business seems pretty good, so why does Manner want to switch to a store that is considerably smaller?

It is understood that there are mainly two reasons for Manner's closure this time. First, the mall itself is adjusting its business format and plans to bring in other brands; second, after the lease expired, the rent for the space may have changed, and from a cost perspective Manner chose to move to a place with better value for money.

Opening locations in core business districts is a common store strategy for many coffee brands, and Starbucks, %Arabica, Manner and others are no exception. Business districts themselves come with high visibility and huge foot traffic. If a coffee shop opens there, it is easy for local consumers to remember it, and sales will rise accordingly.

But shop rent in core business districts is also "every inch of land is worth every inch of gold." For coffee brands, entering a business district may let them borrow a favorable tailwind and gain attention and customers in a relatively short time, but at the same time they also have to bear a series of costs such as rent, utilities and labor. Once the store finds it difficult to cover these expenses, closing the store or moving to a smaller space may be the way to cut losses in time.

In addition, the relationship between a business district and a coffee shop is essentially that of landlord and tenant. Many people have personally experienced situations where the landlord makes the tenant move out because of adjustments to their own plans, and brands will also encounter this when entering business districts. From this point of view, although opening a store in a core business district has many benefits, it does indeed give brands one more concern.

From the case of Luckin opening ten thousand stores, it can be seen that the more stores there are, the more beneficial it is to brand promotion. Therefore, all brands hope to let more consumers remember them by "blooming everywhere," and store expansion remains an important part of brand operating strategy.

However, although brands all want to seize the coffee market by increasing stores, when faced with high opening costs, they also have to slow down, weigh the pros and cons, and then lay out cautiously, lest all their efforts be wasted.

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The above content is compiled by CoffeeHunters, a coffee news website.