Recently, a number of netizens posted on the social platform that Starbucks began to implement "consumption seats" and that non-consumption would be "politely persuaded". In addition, some netizens said that there was a "seating for consumption" sign on the table of a Starbucks store, and netizens speculated that Starbucks began to remind customers that they need to spend in order to be seated.
The related content sparked a hot discussion, which went viral on Weibo.
If you don't spend money to take a seat, will Starbucks persuade you to leave? Latest response
On May 21, in Xi'an, Shaanxi Province, a netizen posted a video saying that at a Starbucks, a man was persuaded by a shop assistant to leave just one minute after sitting down, according to Economic Television Live report.
The video shows the man asking, "No seats, right?" Starbucks employees responded, "if you want to sit and place an order on your phone, you can go to the mall." Finally, the man got up and left.
The video publisher saidTigerSpinHe saw that the clerk persuaded him to leave altogether.TigerSpinThree groups of people.
On May 22, the reporter searched and found that a number of netizens reflected on the social platform that Starbucks began to implement "consumer seating".
Some netizens said that Starbucks issued a notice of "polite persuasion".
The netizen posted: "Starbucks is really good, but every time I spend, I can't afford it, and I lose a good place to be in a daze." A few days ago, I saw that it was OK not to spend, but in fact, it would drive people away, for example, I would keep asking you for an order. " The netizen said that he went to Starbucks to sit for a while and did not order, because the staff kept "persuading to order". In the end, the netizen got up and left.
In the comment area of this post, many netizens left messages for discussion. Some people think that since they do not say that they must spend, they should not be "politely persuaded to go away". Others think that they should "spend as much as possible," otherwise those who want to spend may not have a seat. The netizen also responded in the comments section, "in fact, we should have ordered. I hope Starbucks will continue to open."
In this regard, many netizens expressed support, thinking that "in case those who want to drink do not have a seat", there are also netizens' suggestions. If Starbucks really wants to implement this policy, it can put up a sign on its seat and write the words "consumer seat". Otherwise, it would be embarrassing to be persuaded to leave.
So, is the consumption ability to be seated promoted across the country?
According to the live broadcast of Economic Television, Starbucks' official customer service responded that Starbucks did have "consumption seats" and would be politely persuaded by the shop assistant if it did not spend, but Starbucks would not force customers to spend.
Lawyer: or infringe upon the legitimate rights and interests of consumers
Does it infringe upon the rights and interests of consumers for businesses to drive out unconsumed seats?
According to media reports, lawyers Huang Kailing and Yang Enxiong of Guangdong Green Law firm said that there are tables and stools at the door of many milk tea shops or coffee shops, and it has always been controversial whether they can be seated or used without consumption.
The lawyer said that if the store allows customers to use it, it means that the store provides services, and according to Article 3 of the Consumer Rights Protection Law, this Law applies to operators who provide services to consumers.
Article 16 of the Law on the Protection of consumers' Rights and interests stipulates that when providing commodities or services to consumers, business operators shall abide by social morality, operate in good faith, and protect the legitimate rights and interests of consumers; they shall not set unfair and unreasonable trading conditions, no forced transactions.
The lawyer also said that Starbucks updated its employee manual several years ago to allow customers who do not spend money to be seated or use the bathroom in the store. In other words, Starbucks has provided services to those who are seated, applying the Consumer Protection Law, and Starbucks should fulfill its obligations under the law. In this incident, if the shop assistant drives out those seated without consumption, it obviously infringes upon the legitimate rights and interests of consumers.
Starbucks China revenue declines
The market capitalization has exceeded 140 billion yuan since the end of last year.
Starbucks recently disclosed that in the second quarter of 2024 to the end of March, Starbucks had revenue of 85%.TigerSpin.63 billion US dollars, down 1% from the same period last year.TigerSpin.8%; net profit from home was $772.4 million, down 15% from a year earlier.
By the end of the second quarter, the number of Starbucks stores in China had reached 7093, a net increase of 118 from the previous quarter.
During the period, Starbucks China's revenue fell 8 per cent year-on-year to US $705.8 million, with same-store sales down 11 per cent, mainly due to a 4 per cent drop in year-on-year tradable volume and an 8 per cent drop in average customer unit prices.
"Macro-pressure led to a decline in traffic in the quarter, which was affected by a reduction in occasional customers, changes in holiday patterns, a highly promotional environment and the standardization of customer behavior after the market reopened last year." In an earnings call, Laxman Narasimhan, chief executive of Starbucks, explained the volatility in the Chinese market.
Behind it is the slowdown in market growth and the continuation of a brutal price war.
This is the second year that the industry has entered a price war.
On April 29, Coffee Coffee announced that the current store subsidy policy would be extended to December 31, 2026, which covers existing stores and new stores in the future. Different stores can receive different amounts of subsidies according to different factors such as rent and competition. The maximum subsidy per cup can be up to 14 yuan. As of May 10, in Beijing, Ruixing 9.9 yuan limited the product category and limited to individuals. Cuddy continued to fill the court with 9.9 yuan.
Such a market obviously has an impact on Starbucks, such as the decline in the unit price of the brand, which claims to be high-end.
Starbucks shares closed at $78.305, down 2.99%, with a total market capitalization of $88.696 billion, about $20 billion (145 billion yuan) less than at the end of last year.
Accelerated sinking
At the very least, Starbucks is verbally reluctant to participate in the price war.
Nasheim stressed that Starbucks is a high-end brand. In one case, Starbucks is launching more new products in China. In the second quarter, Starbucks China launched 27 new products, double the number of new products in the previous quarter and triple the number in the same period last year. The brand said the Elanto series of drinks exceeded expectations.
During the same period, Starbucks'90-day active membership exceeded 21 million, reaching an all-time high, with a total membership of more than 127 million. The share of member sales has increased to 75%. The consumption frequency of Venus members also increased.
In addition, in the current period, Starbucks China digital business (dedicated star delivery and brown express) accounted for nearly 52%. Among them, the brown fast business accounts for 26%, and the sales volume of the same store has increased.
But that still doesn't change the decline in Starbucks' revenue in China. For now, the company is putting increments in the sinking market.
"In view of the strong economic benefits of new stores in the sinking market, we will further expand new stores in the sinking market, especially in new county-level cities." Nashan said.
Wang Jingying, Chairman and CEO of Starbucks China, also revealed in the earnings call that Starbucks has covered nearly 900 of China's nearly 3000 cities above the county level. During the quarter, the number of 90-day active members in the sinking market grew rapidly, and the growth rate of members exceeded that of high-line cities. Member sales have grown significantly, with sales growth twice that of the High-Line cities.
Previously, Wang Jingying told 21st Century Business Herald that more refined operations are needed in low-tier cities. "When we enter a county, there is a very different approach to making sure we don't just open a store, we open a store for the area, for the community." She said. This indicates that Starbucks needs to be more flexible in terms of management.
In addition, how much purchasing power the sinking market has is an inseparable question.
Today is an era where cost-effectiveness is pursued. Various financial reports show that in the first quarter, the unit price of KFC customers fell by 6% year-on-year, and the unit price of Pizza Hut customers fell by 12% year-on-year. The unit price of Taier pickled cabbage fish/chicken hot pot/Jiumao Jiujiu customers was 73/116/57 yuan respectively, compared with last year. In the first half of the year, they fell by 2.7%/4.1%/3.4% respectively. In 2023, the unit price of offshore fishing passengers has dropped below 100 yuan (99.1 yuan). Wefu Lao Noodle revealed that the overall product decline is about 30%.
"In the past, we had almost no hesitation in pricing products at 34 or 35 yuan. Pricing will now take into account market factors." Li Xuelin, founder of Hefu Lao Noodles, told the 21st Century Economic Report reporter.
From a more macro perspective, there is a similar trend. Data from the National Bureau of Statistics showed that per capita disposable income grew by 6.2% in the first quarter, while per capita consumption expenditure grew by 8.3% in the first quarter, exceeding the growth rate of income.
This means that more and more part of the income composition is used for consumption, reflecting the increased willingness of the public to consume. It also means that it is more difficult for consumption to continue to grow.
In this situation, it is undoubtedly a risk for Starbucks to choose to add money in a sinking market with lower per capita disposable income.
According to previous plans, Starbucks plans to open 9000 stores in 300 cities in China in 2025.
(Article source: 21st Century Business Herald)