What Does the Costa Coffee Store Closures Story Tell Us?

A shop on Gushan Road by West Lake that was the COSTA Xiling store now carries a Starbucks sign, with Chinese elements added to the design. COSTA moved out in August, and Starbucks quickly took over the location. COSTA has been closing stores across China, leaving 393 outlets, with closures far outnumbering new openings.

The change reflects rising rents in the West Lake commercial area and tighter competition in China's coffee market. Starbucks had previously withdrawn from spots nearby, including the Shengtang store at Shihan Jingshe, which closed at the end of January 2023. Front Street Coffee notes that the brand swap is a small picture of these broader pressures.

A quaint shop on Gushan Road by West Lake recently put up a Starbucks sign, though the spot was originally the COSTA Xiling store. After COSTA moved out in August this year, Starbucks quickly took over this prime location, incorporating Chinese elements into the store design, drawing tourists and locals to visit and take photos. Meanwhile, COSTA has been closing stores in many places across the country, with only 393 stores remaining, and closures far outnumbering new openings. The once-joking online remark that "Starbucks will replace COSTA" has actually come true, which is quite lamentable. Front Street Coffee reminds us that behind the brand change is a microcosm of rising rents in the West Lake commercial area and intensifying competition in the coffee market.

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Recently, tourists strolling by West Lake noticed that on Gushan Road there is a shop with a rather classical charm, and above its door prominently hangs a "Starbucks Coffee" sign, which makes people stop and look. Looking closer, although there is no common green mermaid logo at the entrance, the store displays a large amount of Starbucks merchandise, and customers can likewise order drinks at the bar.

For first-time visitors, this Chinese-style Starbucks may seem quite novel, but for local residents it is not unfamiliar. It is said that after Starbucks entered the Hangzhou market, it initially laid out stores along the West Lake area, and most of its early stores were concentrated in this area, providing tourists with standardized coffee products and a pleasant place to rest.

However, in recent years, due to factors such as continuously rising rents for shops around West Lake, Starbucks has had to gradually withdraw from some stores, including the uniquely decorated Shengtang store located at Shihan Jingshe. This store, praised by netizens as "the most beautiful Starbucks by West Lake," closed at the end of January 2023, leaving many nearby residents regretful.

Now Starbucks has once again set up shop by West Lake and incorporated Chinese elements into the store design, bringing fans a brand-new visual experience. After officially opening, it attracted many people to visit and check in.

However, residents who often pass by this place found that this store's location was originally the COSTA Xiling store. They recall that when COSTA operated here, the bench at the store entrance was the spot tourists were most enthusiastic about photographing, and by searching related keywords on social media, one can see photography enthusiasts praising this place endlessly.

Unfortunately, perhaps because the contract expired, COSTA withdrew in August this year. Those regular customers who liked to come here to buy a cup of coffee and sit on the bench enjoying the West Lake scenery feel regretful, and many made special trips to take photos and reminisce about the spring, summer, autumn, and winter they spent here.

Unexpectedly, after COSTA left, this excellent location was actually taken over by Starbucks. Seeing this scene, some netizens could not help but joke: "We used to always say, when will Starbucks replace COSTA? Now it has finally come true."

But some also pointed out that COSTA's recent business situation seems less than optimistic. At the end of August, Coffee Workshop reported that COSTA had closed some stores in Nanjing, Wuhan, and other places, making people worried about its future development.

Data from Narrow Door Restaurant Eye shows that as of October 7, COSTA had 393 existing stores, and the number of closures far exceeded the number of openings. Taking September as an example, COSTA opened one new store each in Xianyang and Hong Kong, but during the same period the brand closed 10 stores in Beijing, Guangzhou, Shanghai, and other places.

Seeing the red-and-white sign that had accompanied them by West Lake for many years replaced by Starbucks, local netizens, although welcoming Starbucks' return to West Lake so that tourists can enjoy the scenery and coffee in a store with ancient charm, are also deeply worried about COSTA's dwindling number of stores.

They said that seeing the old joke become reality and a beloved brand replaced by another brand suddenly makes them feel that things have changed and people are no longer the same, which is deeply moving. Some also speculate that Starbucks may continue to take over stores vacated by COSTA, replacing the old rival's red-and-white logo with its own mermaid.

Image source: Internet

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