What the Starbucks Reserve closure says about china and coffee

Starbucks has confirmed that its Reserve store at Guangzhou Tianhe Parc will close in the coming days. The store opened in November 2017 to mark the company's 15th anniversary in the South China market and was known for its spacious, modern design. Unlike earlier closures in fading districts, this site sits in a core Tianhe commercial area and was often full.

Starbucks attributed the closure to commercial district format adjustment and noted more than ten nearby stores remain available to customers. High rent, low table turnover from the open-plan layout, and visitors who took photos without buying may have made profitability difficult. The case adds a chapter to the history of coffee in China, where premium flagship formats face pressure even in prime locations.

Recently, news emerged that the Starbucks Reserve store at Guangzhou Tianhe Parc is set to close, and it has been officially confirmed that it will formally cease operations in the coming days. This store, which opened in 2017, was created by Starbucks to celebrate its 15th anniversary of entering the South China market, and was once hailed as "one of the most design-forward stores in Guangzhou." Unlike previously closed old stores located in declining commercial districts with dwindling foot traffic, this closure is in a core commercial area of Tianhe District, surrounded by major brands, and the store was almost always fully seated on a daily basis. However, high rent, low table turnover caused by the open-plan space, and phenomena such as "people who only check in for photos without consuming" may have made it difficult for the store to turn a profit after deducting costs. Starbucks stated that the reason for the closure is commercial district format adjustment, and noted that there are still more than 10 nearby stores for customers to choose from.

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Recently, netizens have been posting on social media that the Starbucks Reserve store at Guangzhou Tianhe Parc may be about to close. Although the specific closing date has not yet been confirmed, some consumers have received confirmation from staff, "perhaps next month, and we are still waiting for further notice." This rumor quickly sparked widespread discussion among consumers and fans.

It is reported that this Starbucks store rumored to be closing is a Reserve store specially created by the brand to commemorate the 15th anniversary of its entry into the South China market, and it officially opened in November 2017.

Judging by its opening date, this Starbucks Reserve is not an old store with a long history, but thanks to its luxurious configuration, spacious interior, and highly modern decor style, it won the favor of many consumers right from its opening and was even praised as "one of the most design-forward stores in Guangzhou."

Unlike the old stores that were previously closed, most of which were located in "declining commercial districts" with gradually decreasing foot traffic, this Starbucks Reserve store set to close is located at Tianhe Parc in Tianhe District, Guangzhou, in the city's core commercial area, surrounded by well-known brands, making it a must-visit rest spot for many local fans when shopping on weekends.

In the eyes of many loyal fans, this Starbucks Reserve store is not only conveniently located and beautifully designed, but also especially comfortable in environment. Whether ordering a coffee to work or study quietly, or coming to take photos and check in, it is a good choice. So business is actually very good normally, almost always full, and after buying coffee people often cannot even find an empty seat. Now that it faces closure, it has naturally triggered regret and reluctance among many fans.

However, for other consumers familiar with this store, rather than immersing themselves in nostalgia, they are more puzzled: why would Starbucks suddenly close a store with such good business?

In response, some observant netizens pointed out that many seemingly full-seat scenes do not actually represent the store's real consumption situation. "For Starbucks, being fully seated and doing good business are not necessarily linked."

First, this Starbucks Reserve is located in such a bustling area, so the rent naturally cannot be low. At the same time, the store has an overall open-plan space and exquisite decor, so it is inevitable that some people enter the store and "only check in without consuming," or order one coffee and sit there all day. This lowers table turnover, and there is also the situation where "real paying customers have their seats taken."

Many people believe that although this Reserve store is indeed quite popular at present, Starbucks still resolutely chose to close it, most likely because after deducting various structural costs, it was difficult to maintain profitability.

According to a report by Xiaoshidai on the 17th, Starbucks has now confirmed that the Guangzhou Tianhe Parc Reserve store will officially cease operations in the coming days, with the reason being commercial district format adjustment. "There is inheritance between old and new, and there is also replacement of old by new. It is already normal for old stores to be replaced by new ones." Regarding this closure, Starbucks stated, after the Tianhe Parc store closes, there are still more than 10 stores in the surrounding commercial area that can provide experience and service, and customers can reach the corresponding stores in as little as a 3-minute walk.

Image source: Xiaohongshu screenshot

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