Can Cotti Reach 50,000 Stores in the Coffee Chain Race?
Cotti Coffee announced plans to add 8,000 convenience-format stores in the second half of the year and reach 50,000 outlets within three years, aiming for a layout where Cotti sits within a hundred meters. As of late July, monitoring showed 6,841 stores still operating and 872 closed, so actual scale remains under 8,000 and far from the target.
Luckin answered with more than 20,000 stores, using dense placement to slow Cotti's growth, and the rivalry has moved from the 9.9 yuan price campaign to a contest over locations. The two brands share origins, and the fight has spread across the sector, with Starbucks quietly adjusting prices and other chains affected. The outcome will shape how retail coffee expands, unrelated to how does coffee grow in producing regions.
Cotti Coffee recently announced an ambitious expansion plan: adding 8,000 convenient stores in the second half of the year, reaching a scale of 50,000 stores within three years, and striving to achieve a layout where "Cotti is within a hundred meters." However, as of the end of July, its actual operating stores were fewer than 7,000, still far from the target. At the same time, Luckin launched a counterattack with a scale of more than 20,000 stores, curbing Cotti's growth through dense store placement. The two sides shifted from the 9.9 yuan price war to a battle over locations. How will this competition between brands born from the same root evolve? This article reviews the store rivalry between the two major brands, their strategic adjustments, and the impact on the industry.
▲
Click to follow | Daily specialty coffee culture magazine Coffee Workshop
On July 23, Cotti announced an aggressive store-opening plan: to open 8,000 convenient stores in the second half of the year and push the total number of stores to 50,000 within the next three years, thereby achieving the vision of "being able to find Cotti within a hundred meters."
However, the latest statistics from GeoHey Brand Monitoring on July 26 show that Cotti currently has 6,841 stores still in operation, with 872 already closed. Although public information once mentioned that Cotti announced at the end of 2023 that it had more than 7,000 stores, the total number of stores currently in actual operation is still less than 8,000.
When Luckin's store scale reached 20,000, Cotti suddenly made a bold claim, which inevitably made onlookers curious: are these two brands "born from the same root" about to launch another round of rivalry?
(Image screenshot from: GeoHey Brand Monitoring)
In October 2022, in order to quickly build brand awareness and grab a share of the market, Cotti at the time launched a 9.9 yuan coffee discount campaign. At the same time, during its expansion, the brand mostly chose to open stores right next to Luckin, making its targeting very obvious and attracting a great deal of outside attention.
Luckin, which had been "confronted head-on" by Cotti, was forced by competitive pressure to follow with a 9.9 yuan price war. But the impact of this confrontation spread across the entire coffee industry: Starbucks quietly lowered prices, Lucky Cup, backed by Mixue Bingcheng, saw its growth stall, and countless offline coffee shops went out of business.
As for Cotti and Luckin, which started the price war, both sides actually paid a price in this fierce contest. Therefore, at the beginning of this year, Luckin acted before Cotti, gradually withdrawing from this unprofitable competition by narrowing the scope of 9.9 yuan redemptions and shifting the battlefield between the two sides to a "battle for locations."
According to a 36Kr report, in order to preempt locations Cotti might choose, Luckin not only opened new stores in lower-tier cities, but also intentionally increased store density in office buildings, schools, communities, and other areas in first- and second-tier cities. In just half a year, Luckin added 7,754 stores, and with a store-opening speed rarely seen in the industry, it recently surpassed 20,000 stores.
The report also mentioned that Luckin was willing to pay high rent to open directly operated stores just 200 meters away from Cotti, while also encouraging franchisees to open new stores within 500 meters of old stores, achieving a surge in store numbers through this method of preemptive positioning.
But the consequence of doing so was that some stores originally selling a thousand cups a day saw sales cut in half directly due to "densification," which also dragged down Luckin's key "same-store sales" metric in its financial reports. It is reported that the first-quarter financial report this year disclosed that this metric fell by about 20%. Some industry investors revealed that this metric performed even worse in the second quarter.
In fact, although Luckin's move was "self-damaging by eight hundred," the effect was quite significant. Under the suppression of Luckin's "densification" campaign, high-quality store locations decreased, and coupled with considerations such as rent and renovation costs, Cotti's store expansion speed this year was difficult to increase, with the data remaining at around 6,000.
Another person familiar with the matter revealed that Luckin's approach not only squeezed Cotti's potential growth space, but also suppressed the cup volume of Cotti stores. For Cotti, which hopes to seek new financing through scale expansion, Luckin's counterattack was swift and powerful, bringing it no small impact.
So in May this year, Cotti began vigorously promoting a low-threshold store format, "COTTI Express." This convenient store relies on existing stores such as convenience stores and chain restaurants, requiring only the space of one counter to operate, and the original staff can make coffee part-time after training.
According to the brand's promotion, this model requires little investment, can greatly reduce rent and labor costs, and can also cleverly integrate into various business formats and scenarios, making it highly feasible. According to Jiemian News, within two months after the launch of this model, Cotti had more than 100 store-in-store locations opened; and from recent store-opening data from GeoHey Brand Monitoring, Cotti's number of new stores from June to July showed a gradually rising trend.
However, this figure is far from Cotti's target of "8,000 convenient stores," and even more distant from the vision of "50,000 stores in 3 years." In this "battle for locations" with Luckin, whether Cotti can achieve the expected results and fulfill the promises it has made externally still needs time to answer.
Image source: Internet
Disclaimer: Some images in this article are from the Internet. For some content on the website, such as images, we will respect the original author's copyright and indicate the source. However, due to the large quantity, there may be individual images or texts that have not yet been credited. Please understand. If the original author has any dispute, they may contact the website for handling. Once verified, we will correct it immediately. Compiled and edited by "Coffee Workshop." Please indicate the source when reprinting. If there is infringement, please inform us for deletion. Thank you~!
The above content is compiled by CoffeeHunters, a coffee news website.
