Major coffee chains raise prices in China

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

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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.