Tag: starbucks

  • KFC poised to expand after strong full year sales

    KFC poised to expand after strong full year sales

    Restaurant Brands is planning to expand the number of KFC restaurants it operates across Australia and New Zealand off the back of strong sales over the 12 months to February 2019, which contributed to the group’s overall 7.2 per cent increase in full-year sales of $764.6 million (NZ$794 million).

    In Australia, KFC’s sales grew 27.8 per cent to $178.3 million, thanks to new store acquisitions in the period. Same-store-sales grew 4.7 per cent.

    Starbucks saw a 4 per cent increase in sales to $15.4 million, and was sold to Tahua Capital on 23 October 2018.

    Carl’s Jr., however, saw an 8.8 per cent decline in total sales to $30.7 million. Same-store-sales also fell 3.3 per cent over the year.

    The group’s performance in New Zealand was more varied.

    KFC’s New Zealand operations improved 5.3 per cent over the period to $324 million (NZ$336.5 million), and 4.3 per cent on a same-store basis, while Pizza Hut faltered – seeing a 14 per cent decrease in sales over the year to $34 million (NZ$35.4 million), down 6.1 per cent on a same-store basis.

    The group is currently in the midst of a partial takeover, with investor Finaccess Capital having proposed to acquire up to 75 per cent of the group’s shares for a premium of NZ$9.45 ($8.68) cash per share.

    Restaurant Brands shares currently sit at $7.33 on the ASX, and $NZ8.62 on the NZX. Currently, Finaccess has secured 33.71 per cent, or just over 42 million, shares.

    The board of Restaurant Brands “unanimously” recommends shareholders accept the partial takeover offer, which closes on 12 March 2019, based on the absence of a superior proposal.

  • Starbucks India caught profiteering from tax cut

    Starbucks India caught profiteering from tax cut

    Starbucks India could be fined after failing to pass on a hefty GST cut to its customers. India’s director general of anti-profiteering (DGAP) has found that Tata Starbucks profiteered by not reducing its prices when the government reduced the GST from 18 per cent to 5 per cent in November 2017. Starbucks India is a joint venture between Tata Group and Seattle-based Starbucks.

    The DGAP submitted its report to National Anti-Profiteering Authority (NAA) recently.

    “The company is found to have profiteered Rs 4-5 crore (US$564,000 to $705,000) as it did not pass on the benefit of GST rate cuts to its customers,” a source told the online publication. “The case is now being heard by the NAA for a final decision.”

    Last year, a regular latte at Starbucks India cost Rs 205, equivalent to US$2.89 plus 5 per cent GST. An overcharge of 13 per cent is equivalent to 38 cents on every cup sold. Starbucks may argue it increased its prices at the time coinciding with the cut to offset increased overheads.

    The probe was sparked by a customer complaint who was unhappy that the company did not reduce its prices when the tax rate fell by such a large margin.

    says that under India’s GST system, businesses have an obligation to compute and pass on the benefit of tax-rate cuts to consumers.

    “Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit (ITC) shall be passed on to the recipient by way of a commensurate reduction in prices,” rule 171 of the Central GST (CGST) Act, 2017, reads.

    A spokesman for Tata Starbucks emailed the publication saying the company “conducts its business ethically and complies with all the local laws and regulations”.

    A decision on the case will take up to three months. If the NAA rules against Starbucks India, the company can be forced to reimburse affected patrons. In the case of a coffee chain, it would be impossible to identify all the affected customers, in which case the NAA may order the overcharged sum to be deposited into a government-operated Consumer Welfare Fund. The authority may also impose a fine.

  • Starbucks Reserve® Roastery Tokyo opened door

    Starbucks Reserve® Roastery Tokyo opened door

    This week, Starbucks celebrates the opening of the Starbucks Reserve® Roastery Tokyo, a four-story tribute to premium coffee quality, innovation and human connection. This will be the fifthRoastery globally, opening to the public on Thursday, February 28, at 7 a.m. JST, reaffirming the company’s 23-year commitment to Japan. The Roastery pays tribute to the important role that Starbucks Japan has played in shaping the foundation of the Company’s international growth. The Roastery introduces customers to more than 100 unique coffee and tea beverages and merchandise, as well as a menu of artisanal Princi Italian fare for the first time in Japan.

    It also celebrates the Japanese culture of connection and craftsmanship through the first AMU Inspiration Lounge –from the Japanese “amu,” meaning “knit together”–to host community gathering events and is planned to become Starbucks first Specialty Coffee Association certified training location in Japan.

    “As the first international market outside of North America, Starbucks Japan has contributed 23 years of innovation for the company globally,” said Kevin Johnson, CEO, Starbucks Coffee Company.

    “The opening of the Tokyo Roastery will further amplify what Starbucks Japan has done across all stores in the market for more than two decades—innovating and delivering the finest quality coffee one person, one cup and one neighborhood at a time.” Takafumi Minaguchi, CEO, Starbucks Japan, added, “The Roastery will amplify and inspire coffee passion across all Starbucks stores, and will serve as a catalyst for a new wave of growth centered on the customer experience and passion for coffee and service. Beginning with the “Make it Yours” campaign that will commence at every store in Japan upon the opening of the Roastery, customers will be invited to experience the first Starbucks coffee roasted exclusively in Tokyo, for Japan, and available in a variety of coffee beverage styles.”

    Collaborative Design Highlights Japan’s Natural Beauty

    Located in Tokyo’s vibrant and creative neighborhood of Nakameguro, the Roastery’s enchanting design was inspired by the famous cherry blossom trees lining the Meguro River.

    The building’s glass walls and terraced floors seamlessly fold into the fabric of the neighborhood, bringing visitors eye-level with the cherry blossoms and the four seasons of the river to reflect the natural beauty and sense of harmony found across Japan.

    The Tokyo Roastery is the only Starbucks Roastery location designed in collaboration with a local architect from the ground up.

    The exterior was brought to life in collaboration with renowned Japanese architect Kengo Kuma. Envisioned by Liz Muller, Starbucks chief design officer and lead designer for all five Roasteries globally, the Roastery highlights the work of local craftsmen and women to create an enchanting destination for coffee exploration and discovery.

    The Tokyo Roastery merges traditional and modern design to deliver a unique and inspired experience across all four floors. Upon entering the Roastery, customers are greeted by the world’s largest Starbucks Roastery coffee cask, four-stories and over 55 feet of blush-tinted copper adorned with hand-crafted copper cherry blossoms, which changes hues throughout the day in different lights.

    The expansive cask was built using the technique of tsuchime, a tradition of copper beating, where each person involved in the building of the Roastery was offered the chance to hammer a portion to create its texture and pattern. The cask’s unique color is balanced against the light wood which has been carried into the interior to give the store a brightness found throughout traditional Japanese architecture.

    Throughout the Roastery, local craftsmen and women were brought together to incorporate their expertise and traditional craft into the design elements.

    The wood-tiled ceiling was inspired by the art of origami, providing a stunning visual experience. The light and airy space carries the light wood used on the exterior to the inside, giving the experience an enchanting aura.

    The wood, sourced locally, has been treated throughout with a traditional technique which prevents it from aging, ensuring the brightness is maintained inside and outside in the years to come.

    Enchanting Immersive Coffee, Tea and Mixology Experience

    The coffee journey at the Reserve Roastery Tokyo is an immersive experience and education in coffee, and its process—from green bean to cup—which begins at the Main Bar on the first floor.

    The open floor plan draws customers into the immersive experience, introducing them to the skilled art of roasting, brewing and hand-crafting beverages. The Reserve Roastery serves the freshest cup of coffee and it is here on the first floor that customers can taste Reserve coffee beverages such as Barrel-Aged Cold Brew.

    The Princi bakery serves handcrafted, authentic artisanal Italian fare that is baked fresh in the Roastery throughout the day. For the first time in Japan, customers can enjoy freshly-baked breads, cornetti, focaccias, pizzas, salads and more.

    An airy staircase leads to the second floor, where customers will be transported into the tradition of Japanese tea at the world’s largest Teavana Bar.

    Exclusive tea beverages, such as the Pop’n Tea Sakura Jasmine, featuring a vibrant hibiscus and cherry popsicle atop a floral jasmine tea, will delight customers with their charming appearance, Japanese ingredients and unique flavor combinations, modernizing the tea experience. On the terraced third floor, Starbucks Japan’s first cocktail bar, Arriviamo™, puts innovation, mixology and cocktail craft on full display.

    The two walls of spirits bring together the Arriviamo menu, featuring coffee and tea-inspired cocktails only available at the Tokyo Roastery, including the Nakameguro Espresso Martini made with chestnut liqueur, crème de cacao and espresso, then paired with decadent chocolate  from Nakameguro’s “green bean to bar CHOCOLATE” brand. Wine, beer and classic mixology beverages will also be available.

    Conversations with an Impact

    Starbucks Japan has more than two decades contributing to the communities it serves.

    The fourth floor of the Starbucks Reserve Roastery Tokyo is home to AMU Inspiration Lounge–a dedicated space for the community to gather for hosted social impact conversations. The concept of “AMU,” which means “to knit together” in Japanese, is founded on human connection and passions coming together, something Starbucks has long believed in. For the first time at any Starbucks location in the world, this intimate space will serve as a platform to host change-makers and creative thinkers from across Japan. The first event in April will celebrate the role of women leaders in Japan.

    The Roastery is planned to become Starbucks first certified Specialty Coffee Association (SCA) location offering training for coffee professionals in the near future.“We believe that where passions connect, the future is sparked, and we will offer the Tokyo Roastery as a gathering space to spark new ideas and create an impact,” said Minaguchi.

    “The Roastery signifies our commitment to fostering moments of human connection over a cup of coffee and using these moments to create positive social impact in the communities we serve.”

    With more than 37,000 partners who proudly wear the green apron across Japan’s 47 prefectures and 250 at the Roastery itself, Starbucks Japan will amplify coffee craft and innovation by freshly roasting small-batch coffees from around the world every day in Tokyo and introducing new beverages, concepts and inspiration to all 1,400 stores across Japan. This amplification will begin with Tokyo Roast coffee, a Starbucks Japan-exclusive coffee, available throughout the market on opening day.

  • Starbucks China unveils new third-place experience concept

    Starbucks China unveils new third-place experience concept

    Starbucks today unveiled its first Starbucks Reserve® Bakery Cafe, featuring fresh Italian Princi food, in China. This brand new third-place (in-store) experience is dedicated to the premium Starbucks Reserve® coffees served alongside artisanal and made-to-order food prepared by Princi bakers onsite every day.

    Each baker has been meticulously trained in the acclaimed Italian baker Rocco Princi’s distinctive method of artisanal craft of baking to perfect the recipes for each food item. The cafe also features an expanded menu of Starbucks signature Mixology, including distinctive coffee and tea-inspired cocktails, Italian classics like Aperol Spritz, fine Italian wines and beers.

    This will be the first-of-its-kind Italian Aperitivo experience (early evening social cocktails paired with small bites) in a Starbucks store location within China.

    “For 20 years, Starbucks has revolutionized, and set new standards, around the third-place for our Chinese customers. Today marks yet another significant milestone as we take everything we have learned around coffee and our relentless pursuit for food innovation, to create a new exciting all-day cafe dining and Italian Aperitivo experience,” said Belinda Wong, ceo, Starbucks China. “Our ability to consistently elevate the customer and brand experience in a meaningful and respectful manner truly reflects Starbucks unmatched energy and operational capabilities to execute against our Purpose-driven Growth Agenda to play the long game in China.”

    As a showcase of Starbucks undisputed coffee leadership in China, the cafe features Starbucks ReserveTM Princi™ Blend as the signature coffee offering for its handcrafted espresso beverages made using the Black-eagle Espresso Machine. This special Reserve blend can also be enjoyed freshly-brewed using the Siphon brewer, Pour-over or Starbucks Draft Nitro.

    Authentic, freshly prepared food is the centerpiece that creates the vibrancy and intimacy within the cafe. Customers can share meals with family and friends at the large community table just feet away from the baking oven and the bountiful display of food creations.

    Inspired by the passion and romance of Rocco Princi’s belief to infuse ‘Spirito di MilanoTM’ into this new retail environment, the coffee theatre transforms into a full mixology bar to offer Starbucks-distinctive coffee or tea-infused craft cocktails, beers, and a fine selection of Italian classics and wines specially curated by Rocco Princi, as the day turns into evening.

    Each day from 5 pm to 7 pm, the store celebrates “Aperitivo Time” where customers can enjoy handcrafted cocktails, wine and beer with free-flow of pizza bites, green olives, and schiacciatine.

    They can choose to enjoy this unique Italian evening social occasion by relaxing at the cafe’s outdoor patio with friends and loved ones, just like Italians would across the streets of Milan.

    “I am excited to work with my Princi partners, and Starbucks, to unlock the infinite possibilities of Princi food elevating every daypart for our Chinese customers, from breakfast, lunch, to the new evening Aperitivo experience. This exceptional opportunity to pair Starbucks Reserve coffees with Princi’s 30-year heritage of serving only the freshest and artisanal food, in a brand new store format, is another dream come true for me,” said Rocco Princi.

    With more than 3700 stores in 158 cities, no other coffee retailer in China has the depth of Starbucks coffee expertise, strength of the most sought-after world-class retail locations, and pipeline of meaningful innovations to elevate the customer experience.

    Building on the overwhelming positive reception of freshly baked Italian PrinciTM food at the Shanghai Roastery, and the continued enthusiasm customers have towards Starbucks portfolio of innovative store concepts, the Starbucks Reserve® Bakery Cafe is yet another reflection of Starbucks holistic approach to build an exceptional third-place experience, further cementing its unparalleled leadership and success in China.

  • Positive result from anti-plastic campaigns by Starbucks, 7-Eleven

    Positive result from anti-plastic campaigns by Starbucks, 7-Eleven

    Starbucks Korea and 7-Eleven Thailand have announced positive results for their respective anti-plastic campaigns. A report revealed that the local Starbucks subsidiary has seen consumption of single-use straws cut by half in the months since introducing strawless lids on drinks without whipped cream or that do not need stirring. The initiative, introduced last November, has resulted in the monthly average of 15 million straws used across its coffee chain stores drop to 7.5 million per month. The company now only provides straws to customers who request them.

    Aiming to further reduce straw usage by up to 70 per cent, Starbucks Korea is planning an online event to offer rewards to customers who upload pictures of drinks taken without using straws. It has also introduced paper straws for usage in some beverages.

    7-Eleven saves 169 million bags

    Meanwhile, in Thailand, more than 169 million plastic bags have remained unused over the past two months at 7-Eleven stores, according to a report in local news site The Thaiger, the result of a management initiative to phase out their use. The move, which has been supported by local celebrities, encourages shoppers to refuse plastic bags or bring reusable bags to the store.

    The reductions are reported to have saved the chain more than 33 million baht, which operator CP All Public Company will donate to a local hospital.

    All about perception?

    Despite these reports, there have been growing concerns among critics in the media regarding the perceived environmental benefits of similar plastics initiatives worldwide.

    The sippy cup lid adopted in Korea is identical to the design used in North American stores, which was shown in a Reason magazine report last year to use more plastic than the previous lid design and straw put together.

    Plastic shopping bag initiatives similar to the one adopted by 7-Eleven have provoked skepticism among observers who point out that of all single-use plastic packaging used throughout supermarkets and convenience stores, the shopping bag is the only item that tends to be reused in the home.

    A 2017 report in Australia’s journalism hub The Conversation called getting rid of plastic bags a windfall for supermarkets without much perceptible benefit to the environment. It reasoned that most alternatives that were recyclable ended up in landfills anyway.

  • Starbucks Malaysia celebrates Reserve’s success

    Starbucks Malaysia celebrates Reserve’s success

    Starbucks Malaysia plans to open two or three of its premium Reserve concept stores annually. The brand’s eighth Starbucks Reserve store opened at the end of last month, a 5000sqft flagship at Berjaya Times Square, three years after the first outlet launched at The Gardens Mall.

    “We did not anticipate such a strong reception for the new concept store”, said Starbucks Malaysia & Brunei MD Sydney Quays. “We were surprised because a lot of people were interested to learn about coffee and the various ways of brewing.

    “This is what inspired us to open more Starbucks Reserve stores. The opening of the Starbucks Reserve Berjaya Times Square amplifies our passion for coffee and our ongoing commitment to continue providing unprecedented coffee experiences and knowledge to the Malaysian community, while fostering a culture of human connection”, he said.

    The new rollout schedule aims to cater to Starbucks’ loyal customers’ burgeoning interest in coffee. The brand is planning 30 Starbucks outlets per year including the Reserve venues, as well as regular stores, drive-thrus and small-format stores.

  • Starbucks India to add around 10 stores this fiscal

    Starbucks India to add around 10 stores this fiscal

    Starbucks, a 50:50 joint venture between Tata Global Beverages and Starbucks Coffee of the US, is planning to add up to 10 new stores in the next two months, taking the total count to around 145 outlets, said a top company official. According to a report, the premium coffee chain is increasing the number of roll outs as it is getting overall good consumer response, said Tata Global Beverages (TGBL).

    “We currently have around 136 stores and we would open another between 5 to 10 stores by the end of the year (fiscal). We have seen an increase in the store roll out. We look at activating more stores roll out in the next few years, what we have seen in the past,” L Krishnakumar, CFO, TGBL Group said.

    Tata-Starbucks has recently started food delivery through online food aggregator apps like Swiggy.

  • Top 9 things to know about Starbucks Dewata coffee sanctuary

    Top 9 things to know about Starbucks Dewata coffee sanctuary

    Recently, Starbucks celebrated the journey of coffee from seed-to-cup by opening its largest destination in Southeast Asia – the Starbucks Dewata Coffee Sanctuary.

    1. Original Logo

    Starbucks opens the Dewata Coffee Sanctuary with an original logo, crafted in the Geringsing Double Ikat technique, inspired by the deep traditions of the seed-to-cup story. Double Ikat, found only in Bali, is a weaving technique used to create geringsing fabrics, traditionally taking five years to create, and an essential textile used in ceremonial dress as it is believed to have extraordinary powers. The logo itself is a lotus flower, the symbol of beauty, prosperity and fertility, and highly respected in Bali. The 18 petals represent the Balinese philosophy of Tri Hita Karana – the three causes of prosperity: harmonious relationships between people, the environment and God.

    2. Store Façade

    The store’s façade is created with locally made red bricks in the shape of half circles to create the illusion of the many waves found on Bali’s famous beaches. The exterior appears to move to passersby on Sunset Boulevard as they drive past the storefront, and combines modern building techniques with traditional Balinese architecture for an east-meets-west design. The design is carried into the interior of the store at the core bar where baristas handcraft favorite Starbucks beverages.

    3. Micro-Plot of Arabica Coffee Trees

    Upon entering the space, customers are invited into a micro-plot of Arabica coffee trees. This 1,000 sq. ft. plot will be a working, coffee producing farm cherrying during harvest season in the region, typically in the early springtime, and mirrors the size of 90 percent of all coffee farms in Indoneisa.

    4. Hand-Carved Wooden Mural

    As customers enter the café, their eyes are immediately drawn to the unique artwork filling the store. A 30-foot tall hand-carved wooden mural from Jepara features a depiction of the history of coffee in Indonesia, from the coffee growing regions of Java, Sulawesi, Bali, West Papua, Brastagi and North Sumatra, home to Starbucks Indonesia Farmer Support Center. Over the Reserve bar, customers eyes are drawn up to the bamboo installation inspired by the smoke, steam and vapor that create the familiar aroma of coffee. Both expansive pieces were created by Indonesian art agency, Atrovale, while two Jakarta-based artists, Janet Jane and Jamal M. Aziz, created pieces to highlight the store’s moments of discovery. Janet’s macramé art was inspired by the lush landscapes of Indonesian coffee farms, while Jamal’s two murals illustrate the first-ten-feet of the coffee bean’s journey at origin.

    5. Hand-Carved Stone Tiles

    In the Reserve Bar, hand-carved stone tiles create the ornate floor and wall design. The traditional, local craft found across Bali was reimagined into patterns which reflect a modern interpretation of coffee flowers and coffee beans.

    6. Living Wall

    To the left of the entrance, customers are invited to Starbucks core bar featuring a living wall filled with flora from the region. The botanicals are arranged in the form of Bali’s signature gapura, split gates, a symbol to welcome guests into our stores. This living wall is set back behind the bar where Starbucks partners will enter the café to connect with customers and handcraft their favorite Starbucks beverages.

    7. Clay Pots

    Around the store, customers will be enchanted by the surrounding flora, bringing the unique Indonesian environment inside. Trees throughout the space are planted in beautiful clay pots inspired by a traditional Sumatran pattern and the Starbucks Siren. Motifs of Indonesia’s mountainous terrain and coffee beans remind customers of the unique surroundings found only in Indonesia.

    8. Coffee Seedling Nursery

    On the second floor, customers are invited into the first coffee seedling nursery to be located inside of a Starbucks store. Our partners work with local farmers to take special care of these seedlings and invite customers to help tend to the delicate plants. Inside this greenhouse, customers can touch the first stages of the seed-to-cup journey that brings us our favorite coffee flavors around the world.

    9. Interactive Media Installations

    The experience continues throughout the expansive space where customers can find two interactive media installations to further immerse themselves in the coffee journey. On the first floor, a first-of-its-kind digital wall can be accessed through pressing and twisting various portions of the wall to participate in the planting, processing, roasting, shipping and brewing processed. Above them, customers can hear the stories of Starbucks Farmer Support Center in Indonesia. Two synchronized videos guide visitors through the FSC on walls fashioned from the traditional rattan weavings which inspired the Dewata Bali logo.

  • Starbucks Hong Kong partners with Deliveroo to launch delivery services

    Starbucks Hong Kong partners with Deliveroo to launch delivery services

    Starbucks Hong Kong and Deliveroo Hong Kong, the online food delivery company, announced an exciting partnership to launch a pilot delivery service starting on 21st January 2019. The service will first roll out at 18 participating stores across Hong Kong Island, Kowloon, and the New Territories with plans to expand the program to more stores over time.

    To celebrate the launch of Starbucks delivery service, customers can enjoy free delivery from January 28 to February 3 – an exclusive offer for Hong Kong customers to try out this new offering.

    Also, new Deliveroo customers can enjoy HK$25 discount on each of their first four Starbucks orders on Deliveroo with the code “STARBUCKS100”.

    As the first retailer in Hong Kong to launch mobile ordering feature using its mobile payment technology, Starbucks has continued to embrace the relentless pursuit of digital innovations to meet the high expectations and demand for convenience in Hong Kong.

    The introduction of delivery services with Deliveroo will elevate Starbucks Fourth Place experience, the digital and mobile touchpoint that connects Starbucks with its customers. The delivery service is expected to reach over 30 stores in second quarter, offering convenience to more customers in Hong Kong.

    Deliveroo, the largest food delivery platform in Hong Kong, is growing and this year expects to work with 4,000 riders and 6,000 restaurants in Hong Kong. The company is intent on expanding its offer to consumers, in particular with partnerships such as this. Based on its exclusive data insights, Deliveroo knows that customers are increasingly searching for hot beverages and coffee on the platform. Searches surged by 185% in 2018 while orders for coffee and tea increased by a staggering 245%. Therefore, Deliveroo and Starbucks will go together brilliantly.

    As part of Deliveroo’s corporate offering, Deliveroo for Business, for companies across Hong Kong, Deliveroo will offer bulk Starbucks coffee deliveries to meet the rising in breakfast, lunch and teatime coffee orders in Hong Kong’s business districts. Given the rapid growth of Deliveroo for Business to date, Deliveroo believes this will be incredibly popular amongst Hong Kong workers. As part of this, 25 major businesses with more than 100 employees have already expressed interest in the new Starbucks-Deliveroo offer.

    The pilot delivery partnership allows customers to order and customize some of their favorite Starbucks beverage* and food items to their door step, including the option to modify size, number of espresso shots and dairy selections. We target to ensure every order meets the unparalleled experience and quality that customers are accustomed to in Starbucks stores.

    “We are continuously looking for ways to evolve and innovate our features that are relevant to our customers, thus we are happy to partner with Deliveroo who is as passionate as we are in food and beverage, to offer trusted delivery services and bring ease to our customers,” said Andrew Hui, General Manager, Starbucks Hong Kong & Macau. “The pilot delivery program is a seamless addition to our commitment to explore digital solutions, and the perfect complement to our in-store offerings, further extending the holistic Starbucks experience for customers to enjoy wherever they may be.”

    Brian Lo, General Manager of Deliveroo Hong Kong, said: “Deliveroo is constantly looking for new ways to ensure customers have access to amazing food and drink whenever and wherever they want it, and so we are delighted to work with Starbucks. This partnership will again show people that, on Deliveroo, every option and every occasion is catered for. Deliveroo is growing across Hong Kong and across the world, and with exciting new partners and new offers such as this, we are looking forward to expanding our reach even further. This collaboration will be available for our corporate customers on Deliveroo for Business, for workers who want that vital coffee.”

  • Starbucks to open three more Starbucks Reserve in Malaysia

    Starbucks to open three more Starbucks Reserve in Malaysia

    Berjaya Starbucks Coffee Company Sdn Bhd, which opened its eight Starbucks Reserve concept store in Berjaya Times Squar, plans to open two to three more such stores this year. “The reception has been really good for Starbucks Reserve (stores). We hope to be able to have about two or three Reserve (outlets) every year,” Berjaya Food Bhd’s CEO and Starbucks Malaysia and Brunei managing director Sydney Quays said.

    “The Reserve concept store is not something that you can open many because it is very exclusive. The coffees that we have in a Reserve are very exclusive and you don’t get that in other outlets. So it is very critical that we expand carefully and in locations that are very well appreciated,” he added.

    Historically, Quays said the group has always aimed to open 30 stores a year, with investment around RM50 million to RM60 million.

    According to Quays, the investment for a Reserve concept store is 30% higher compared to the non-Reserve concept stores.

    The Starbucks Reserve Berjaya Times Square joins locations at The Garden Mall, Sunway Pyramid, SkyAvenue Genting Highlands, Publika, Desa Parkcity, Four Seasons Place Kuala Lumpur and Paradigm Mall Johor.

    On its outlook, Quays believes the consumer sentiment has improved as a lot of uncertainty is over, and the rising tourists numbers also augurs well for its business.

    Asked whether the sugar tax announced in Budget 2019 will impact its business, Quays said he is of the view that the new tax will not be a big issue for Starbucks Malaysia.

    “Obviously sugar is an add on product for us, but we have not experienced any negativity in that and I don’t think it will affect us very much,” he said, adding that increase in price to its products is unlikely at this point of time.

    Berjaya Starbucks has 282 outlets in the country comprising 42 drive-thru outlets.

  • Starbucks China sales grow – with a but

    Starbucks China sales grow – with a but

    Net revenues for Starbucks China and Asia-Pacific region soared 45 per cent in the first quarter to US$1.2 billion. While a change of ownership in the East China business at the end of the first quarter of the previous year boosted the figure, the company says the opening of a net 1010 stores during the 12 months – a 13 per cent increase in the network – and a 3 per cent increase in same-store sales also played a part.

    First-quarter Starbucks China operating income rose 13 per cent to US$225.1 million, from $196.8 million. But the company’s operating margin declined 530 basis points to 18 per cent, primarily due to the impact of the East China ownership change.

    CEO Kevin Johnson said the company delivered solid operating results in the first quarter, demonstrating continued momentum in the business, as it drives a growth-at-scale agenda “with focus and discipline”.

    “Comprehensive efforts to streamline our business have allowed us to focus on three key strategic initiatives that position Starbucks for long-term success: accelerating growth in our targeted markets of the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestle, and increasing shareholder returns.

    “Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come,” concluded Johnson.

    In the 13-week first quarter, which ended December 30, global comparable-store sales increased 4 per cent, driven by a 3 per cent increase in the average sale. Americas and US comparable-store sales increased 4 per cent, with transaction numbers flat.

    China-Asia-Pacific comparable-store sales increased 3 per cent, including 1 per cent transaction growth, with China comparable-store sales up 1 per cent, but the number of transactions down 2 per cent.

  • Unison Capital could bag US$442 million for Gong Cha deal

    Unison Capital could bag US$442 million for Gong Cha deal

    South Korean private equity firm Unison Capital is selling its Gong Cha bubble tea franchise in a deal likely to fetch up to US$442 million. The company purchased the brand four years ago for KRW34 billion ($30 million), before taking over its global headquarters in Taiwan in a KRW40 billion ($35.45 million) deal in 2017. The brand’s HQ operates stores in 16 countries.

    The offer has attracted interest from major South Korean F&B players, considering the brand’s stable cash flows and EBITDA margin of 24–25 per cent, compared with Starbucks’ 21 per cent.

    The brand runs 448 outlets within South Korea, and derives 70 per cent of its sales from directly managed stores within Korea and Japan. The firm plans to expand its global store count from 900 to 1700 by 2021, expanding into 10 more countries during the period – with concrete plans to establish stores in the UK, Mexico, Thailand, Indonesia and Cambodia.

    Sales are forecast at KRW180 billion ($159.54 million) this year, compared to KRW134 billion ($118.77 million) last year.

  • Trends that coming in 2019 e-commerce

    Trends that coming in 2019 e-commerce

    Led by transformation in sales channels and customer demand, consumer trends for 2019 will center on subscription e-commerce, faster delivery, and eco-packaging, according to market experts. Subscription e-commerce, a field of business that involves curating products and delivering them on a regular basis, has been gaining popularity because it meets needs for tailored services, value, and convenience. From clean, neatly ironed business shirts to craft beers, you can get almost anything through a subscription service — now, even a car.

    Earlier this month, Hyundai Motor’s Genesis introduced a car subscription program that offers subscribers a choice of four Genesis vehicles for 1.49 million won (US$1,330) per month.

    “Our target group is drivers who want to experience a different variety of vehicle without having to worry about car management. The ultimate goal of our subscription program is to satisfy consumer needs amid shifting mobility trends,” Hyundai Motor said.

    According to industry data, subscriber-based businesses are undergoing an explosive expansion, having grown from 241 trillion won in 2000 to 470 trillion won in 2015, globally. Industry experts expect that number to surpass 594 trillion won by 2020.

    McKinsey & Company said in its “State of Fashion 2019” report that the subscription trend goes hand in hand with users’ desire for experiences, as they are more willing to spend money for a service that delivers tangible benefits along with personalized offerings.

    Meanwhile, over the past year, delivery has gotten faster for merchandise purchased via websites and apps. With services like Coupang’s Rocket Delivery, expecting one’s purchase to arrive the next day has become the new norm.

    Cutting down even further on delivery times will be a major sticking point for e-commerce businesses looking to stay afloat, market insiders said, with businesses now competing to ensure overnight deliveries, particularly of fresh food items.

    Overnight delivery is usually available only in Seoul and some parts of Gyeonggi Province and Incheon for now. Experts estimate that the market value of the industry will have reached 400 billion won this year.

    Lotte Mart currently plans to test-operate a 30-minute delivery service in the first quarter of the new year. Since September, it has offered a delivery service that moves products from its stores within three hours after purchase at an offline store.

    E-commerce company Coupang also plans to make a concerted effort to expand the overnight and even same-day delivery of fresh food products in 2019.

    “Our latest paid membership service, Rocket Wow club, which guarantees next-morning delivery for signed-up members, had already garnered almost 1 million members just two months after the service’s launch. We plan to expand the service to cover all customers across the country in the new year,” a Coupang representative said.

    The environmental packaging boom is set to continue well into 2019 as well. While plastic is not inherently bad, the way it is thrown away is problematic. As a result, an increasing number of consumers are rethinking their plastic use in an effort to cut waste.

    With environmental packaging campaigns spreading worldwide, manufacturers have been challenged to innovate their packaging methods.

    Since September, Starbucks Korea has replaced plastic straws with paper straws at some 100 of its stores in Seoul, Busan and Jeju, in an effort to reduce waste and protect the environment. All its paper straws are coated with soybean oil to make them more durable, the company said.

    The coffee franchise plans to eliminate single-use plastic straws from its 28,000 stores worldwide by 2020. Angel-in-us Coffee, the cafe chain operated by South Korean retail giant Lotte, also introduced special lids for cold drinks in an effort to reduce plastic use.

    “The throwaway culture is rapidly being challenged by increasing consumer awareness of the perils of plastic waste. A dramatic change in attitudes has occurred, forcing brands to rethink how they make better use of plastic in what they offer to consumers, who increasingly demand brands reduce, reuse and recycle plastic waste to better protect them and their world,” said Matthew Crabbe, a director of Trends APAC, in Global Consumer Trend report by Mintel.

  • Starbucks India showcases coffee craft and innovation with ‘Starbucks Barista Pride’

    Starbucks India showcases coffee craft and innovation with ‘Starbucks Barista Pride’

    Starbucks is taking beverage innovation to new heights with the simultaneous launch of 134 new, crafted beverages. Delivering on the iconic ‘Third Place’ experience, while strengthening commitment to innovation and coffee passion, the global coffee chain has introduced a new initiative called Starbucks Barista Pride where baristas from each Starbucks store will feature a beverage unique to their store, conceptualized and created by themselves.

    Till the end of February, all Starbucks stores across India will serve a specially curated beverage, enabling customers to ‘coffee hop’ and try 134 unique beverages across the 134 Starbucks stores in India.

    Based on the idea of customization and personalization, while celebrating the heart and soul of the signature Starbucks Experience, Starbucks Barista Pride is here to showcase the talent and innovation the Starbucks baristas have to offer.

    The wide range of unique beverages includes Turkish Espresso Praline available at the Chapel Road store in Mumbai, Chai White Chocolate Mocha available at the Vega Mall store in Bangalore and Winter Chocolate Cream available at the DLF Hub store in Delhi.

    “Starbucks is committed to delivering an unparalleled, unique experience for every customer. We are delighted to introduce ‘Starbucks Barista Pride’- a new coffee forward initiative which highlights the exemplary coffee skills of our Starbucks baristas and brings to our customers a wide range of artisanal beverages. At Starbucks, we believe in celebrating each customer’s individual coffee preference and profile. For us each cup of coffee is unique and especially suited to the coffee palette of our customer. With a deep understanding of coffee, our Starbucks baristas personalize each cup to perfection,” said Veetika Deoras, Head – Marketing, Category, Digital and Loyalty at Tata Starbucks Pvt. Ltd.

    “We are humbled to lead specialty coffee in India and initiatives like Starbucks Barista Pride are a tribute to our customers and reflect the Starbucks 47-year legacy of sourcing, roasting and serving world’s top Arabica coffee,” she added.

  • Luckin, Starbucks rivalry heats up

    Luckin, Starbucks rivalry heats up

    Luckin vs Starbucks: baristas and technology are engaged in a gigantic battle for Chinese coffee drinkers’ loyalty. Seattle, Washington-based Starbucks Corporation has been the indisputable market leader in the Chinese coffee industry ever since its Beijing World Trade Center branch opened its doors in January 1999. Yet Starbucks’ two decades of coffee dominance in China appears to be reaching its end.

    While “China watchers” and retail industry insiders have been expressing concerns about Starbucks for months, it has taken Wall Street a few months to catch on; just last week, Goldman Sachs downgraded the Starbucks stock from “buy” to “neutral” for the first time in recent memory, specifically citing Starbucks’ bleak business trajectory in China as a major concern.

    Most of this concern is linked to Luckin Coffee 瑞幸咖啡 Ruixing Kafei, the young tech-forward coffee startup that has managed to build more than 2000 outlets throughout 30 mainland cities in just about 14 months of operations, reaching startup “unicorn status” seemingly overnight.

    While China is Starbucks’ largest market after the US, with roughly 3600 stores across 150 cities, it took Starbucks nearly 13 years to achieve Luckin’s current size. Perhaps even more shocking, Luckin is showing absolutely no signs of slowing down any time soon; the Luckin team has publicly announced its goal of reaching 4500 outlets across China by the end of 2019, and as of November, Luckin Coffee’s overall value was estimated to be about US$2 billion, a figure that has almost certainly risen since.

    Luckin is clearly trying to develop a mass-market coffee product that can bring the “coffee shop experience” to the working class at an ultra-competitive price point.

    While its early success may seem unfathomable, it mostly comes down to three distinct points of difference within its business model: the Luckin app, delivery infrastructure, and competitive pricing. For outsiders visiting China or first-time Luckin customers, the most noticeable quirk of Luckin’s business model is that customers are forced to use the Luckin app to purchase a coffee in a Luckin store or have Luckin coffee delivered to their office or home. Luckin does not accept cash payments at all: there are no tills inside Luckin stores. Fortunately, Luckin offers new users a free beverage after their first download, to lessen the pain a little. While this may seem perplexing to many outsiders, this is a feature that distinctly appeals to an increasingly app-focused Chinese consumer base who prefer digital payments to cash.

    Tensions rising

    With tensions rising between China and the US, Luckin has another unique competitive advantage: its status as a truly Chinese coffee brand, owned by Chinese people and tailored specifically to the unique tastes of the Chinese market. If these tensions continue to grow worse, one can expect Luckin to follow the trend of many other Chinese companies by appealing directly to this patriotic sentiment and further distancing itself from the distinctly American image of Starbucks.

    With Luckin’s CEO Jenny Qian Zhiya and most of its senior leadership coming directly from UCAR, a ride-hailing service spun out of rental car giant Car Inc, it should come as no surprise that transportation and delivery are two key focus points of the business. With the exception of a few sit-down locations in hot real estate areas, the vast majority of Luckin Coffee locations do not offer customers a place to sit. While many locations have space for customers to wait in line and pick up drinks, roughly half of Luckin stores are “preparation stores” that focus solely on preparing beverages for the endless queue of Luckin delivery drivers. Thanks to this elaborate and effective delivery system, customers can usually expect to get their coffee quickly; Luckin claims the average delivery time is roughly 18 minutes, (and even during the busy morning hours in my Beijing office park, I never had to wait longer than 30 minutes). With young Chinese city-dwellers becoming more and more reliant on delivery services like Ele.me and Meituan Waimai, Luckin’s impressive delivery capabilities allow the company to remain convenient and attractive. As a side benefit, this store setup also allows Luckin to place most of its shops in cheaper out-of-the-way locations with limited foot traffic, allowing for significant real estate savings.

    Price the differentiator

    Perhaps the most important point of differentiation between Luckin and Starbucks is price.

    While Starbucks generally charges at least 35 RMB (US$5) for most of its coffee drinks, Luckin’s prices generally fall in the 20 to 25 RMB range, with only a 6 RMB surcharge for delivery.

    Luckin also regularly runs promotions that bring the price per cup down to as little as 10 RMB, prices no competitor has been willing to match. While the exact price of a Luckin coffee fluctuates dramatically due to promotions, customers can generally expect to pay 30-40 per cent less than they would pay for a similar drink at Starbucks. Perhaps even more appealing, Luckin’s widely used “refer a friend” system rewards users who convince their friends to download the Luckin app with a free beverage.

    These three aspects of Luckin’s business platform have clearly caught on with young Chinese customers and urban office workers, who are increasingly looking for cheaper and more convenient coffee options. It appears that Starbucks ultimately has little chance of competing with Luckin in this lower end of the market. While Starbucks does have an app developed for the Chinese market, it is not nearly as intuitive or eye-catching as Luckin’s well-developed system. Similarly, after Starbucks failed to catch the wave of China’s food-delivery boom, it may be too late for Starbucks to substantially overhaul its delivery capabilities. Starbucks did not implement its own internal delivery service until August last year, arguably three years too late.

    Until last summer, Chinese customers have been forced to improvise their own “hacked” Starbucks deliveries through the app Ele.me; those wanting Starbucks coffee had to use an unwieldy two-step process using two separate apps to get their drinks delivered.

    While Starbucks could use its resources to develop a more effective app and more efficient delivery system for the Chinese market, it is likely too little, too late; after ignoring these two major trends in Chinese retail over the past few years, Starbucks is already considered an inconvenient option by rushed coffee customers, an image that will prove hard to shake off. And after spending nearly two decades cultivating the company’s image as a high-end aspirational brand for the emerging Chinese middle class, it is unlikely Starbucks can drop its prices enough to compete with Luckin’s promotional pricing.

    Going high

    Ultimately, it seems Starbucks has no choice but to “go high” in this market. While Luckin has already cemented itself as the most popular option among working-class coffee drinkers looking for an everyday beverage option, the startup has yet to grab the attention of the more status-driven higher end of the coffee market. As many industry insiders have pointed out, Luckin’s “take-and-go” model and delivery focus does not offer customers the high-end experience of whiling away an afternoon sitting at a coffee shop. So while Starbucks executives certainly have significant reason to be concerned over their dwindling market share, Starbucks still maintains a solid grasp on the market for customers seeking a true coffee experience, rather than just caffeine boost to get them through the day.

    This split in the market has been happening naturally, and is quite apparent: if you visit a Luckin outlet in any tier-one Chinese city, you will most likely encounter either a delivery man holding several bags to be delivered or a young office worker making the coffee run for his or her office, taking 10 or 20 cups back up to the office. Meanwhile, the most common sight at an urban Starbucks location is a store filled with tables, each crammed with Chinese millennials or parent groups chatting the afternoon away. In a sense, this harkens back to the ethos of the company’s original entry into China in the late 1990’s: Starbucks built its business in China by providing customers with第三空间 di san kong jian, a “third place” between home and work that functioned as a public conference room or a relaxing respite from the busy world outside, an important societal role that was traditionally satisfied by China’s ancient tea house culture. As Gwynn Guilford, reporter for Quartz, puts it: “In China, Starbucks doesn’t sell coffee to make its millions… it rents couches.”

    If the statistics are to be believed, there is certainly space in the market for both companies; Chinese citizens drink just four to six cups of coffee per year on average, compared to 250 among British residents and 360 for Americans. While Starbucks will likely continue to face struggles as the company redefines its hold in the Chinese market, this year we will see how Luckin Coffee’s unique business model fares – will Luckin continue to set record-breaking growth numbers, or will it shatter before showing any profit?

    –Hunter White-