The UK-based coffee chain says innovation is key to gaining an edge in the competitive Chinese coffee shop market and will consider expanding its drive-thru format in the country soon
Costa Coffee will consider the potential expansion of the format once the pilot is complete | Photo credit: Costa Coffee
Costa Coffee has opened its first drive-thru store in China in the Pudong District of Shanghai.
The UK-based coffee chain, which operates approximately 400 outlets in the country, said the opening at the Waigaoqiao Free Trade Zone represents its first drive-thru store pilot in China.
Costa Coffee will consider the potential expansion of the format once the pilot is complete.
“At Costa Coffee we are committed to providing great service and experience for customers when they visit our stores. We are excited to open our first drive-thru store in China as showcasing great innovation is a key focus for us to gain a competitive advantage in the market here,” a Costa Coffee spokesperson said.
Costa Coffee entered the Chinese market in 2006 and set a target in 2011 to reach 2,500 stores in the country by 2022.
However, Costa Coffee’s growth did not materialise as planned and the company began closing outlets during the pandemic as trading restrictions drastically hindered in-store trade.
Difficulties during the pandemic also led Filipino foodservice giant Jollibee Foods Corporation to end its operation of Dunkin' in China.
Jollibee and Dunkin’s joint venture agreement began in January 2015 with the foodservice conglomerate planning to open more than 1,400 outlets over 20 years across select Chinese regions, including Beijing.
However, having only opened seven stores in total to date, the partnership ended in November 2022.
Nonetheless, despite a prolonged zero-Covid policy in the country interrupting trade for the last two years, some international operators have recently gained traction in the Chinese market.
US coffee chain Starbucks reached 6,000 stores in China in September 2022 amid plans to increase its Chinese footprint by 50% and reach 9,000 outlets by 2025.
Meanwhile Canada’s Tim Hortons has grown its Tims China presence in the country with several retail partnerships, including with 27,000-strong convenience store chain Easy Joy.
Tims China generated revenues of $43m in its third quarter of 2022, 68% higher than the same period in 2021, and opened its 500th outlet in the country in October 2022.