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Costa trims China cafe network

British coffee franchise Costa will pull back further from the China market by early next year.

In response to a dip in consumer demand, the Coca-Cola-owned firm reduced its physical stores within the territory by around 10 per cent last month, half of which were located in the capital, Beijing. It has also shuttered its entire network in the coastal city of Qingdao.

Reporting in the South China Morning Post showed that the brand’s long-standing aspirations for China have been frustrated during the Covid-19 pandemic, caused by rising unemployment and other economic factors hit by the outbreak. The firm’s operations have also been strongly impacted by the virus within its home market, with 1650 staff dropped off the payroll in the UK.

Costa has had significant difficulties facing the competitive Chinese coffee shop market, having launched just a sixth of its 2500-store target network since opening in 2006. Despite this, recent statements by the firm reaffirm its commitment to the market.

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