Starbucks, Luckin Coffee and Tim Hortons have all raised prices in China amid rising operational costs and inflation sweeping markets around the world
Starbucks, Luckin Coffee and Tim Hortons have raised beverage prices by between 1 yuan and 3 yuan ($0.16-$0.47) | Photo credit: Jeffery Ho
Major coffee chains in China are increasing the price of beverages amid rising costs and inflation. Starbucks, Luckin Coffee and Tim Hortons have all raised prices by between 1 yuan and 3 yuan ($0.16-$0.47) according to mobile apps and online menus.
Market leader Starbucks operates more than 5,500 stores in China, with the East Asian nation a key growth market for the Seattle-based coffee chain. Reporting its first quarter results
, in February 2022, Starbucks cautioned that rising inflation and staff shortages continued to present a challenging trading environment around the world.
Reflecting this dynamic Starbucks said revenues from stores in China decreased 2% to $897m in the period, with like-for-like store sales falling 14%. Nevertheless, the coffee chain still opened 694 stores in China during its first quarter.
Domestic rival, Luckin Coffee, has also resumed expansion in China as it seeks to draw a line under the $300m accounting scandal that has marred the company’s fortunes. The coffee chain opened a record 360 stores in China during January according to an internal memo sent by CEO Guo Jinyi.
Meanwhile, Tim Hortons has around 335 stores in China. The Tims China-operated business recently partnered with supermarket chain METRO China
to open smaller format coffee shops in-store.
World Coffee Portal data shows the average cost of a latte among China’s top five coffee chains was 19.24 yuan ($3.04) in 2021.
China’s branded coffee shop market will exceed 36,000 outlets by 2025 at growth of 11% CAGR.