Costa Coffee to close more stores in mainland China by January following adjustments to retail strategy

Name: Chinese businesses still face grim economic reality despite Covid-19 restrictions being lifted
Uploaded: 2020-09-07T12:32:18.000Z
Duration: 5 min 26 s
Description: Chinese businesses still face grim economic reality despite Covid-19 restrictions being lifted

Coffee chain has closed about 40 stores or a tenth of its mainland presence since last month amid falling demand, stiff competition: local media reports

The retreat in China follows last week’s decision to trim its UK headcount because of the Covid-19 crisis

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Customers seen at a Costa Coffee store in Shanghai Hongqiao International Airport. Photo: Alex Tai/SOPA Images

Pearl Liu

Published: 8:32pm, 7 Sep 2020Updated: 11:29pm, 7 Sep 2020

Costa Coffee, the UK’s largest coffee chain, plans to further reduce its presence in the mainland China market by January 2021, after shutting down almost a tenth of its stores since last month.

The rival to Starbucks has closed some 40 stores since August, including nearly 20 in Beijing, two in Hangzhou, two in Shanghai, six in Nanjing and all six branches in Qingdao, according to local media reports.

The chain, which is owned by the Coca-Cola Company, “will be closing a number of stores between August and January 2021” as part of the adjustments to its retail strategy amid shrinking demand, a spokesperson told the Post in an email on Monday.

The retreat comes as a blow to the London-based chain’s ambition to tap into China’s consumption story, which took a major hit during the coronavirus outbreak. While China’s economy rebounded last quarter from a historic slump, the high unemployment rate has hurt spending power and discretionary consumption.

05:26

Chinese businesses still face grim economic reality despite Covid-19 restrictions being lifted

The pullback could be a reflection of its headquarters’ decision to tighten the belt. The chain announced on September 3 a plan to lay off 1,650 employees in the UK, or about a tenth of its UK headcount, citing the Covid-19 crisis.

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