Starbucks' China business will one day overtake its US market

[AndrewJin]

One coffee costs 5 to 10 cents including the hot water.. you sell it at 2, 3, 4 or 5 $.. that is very little money for you? multiply that with a minimum of 500 coffee a day (a small example) with an average 2 to 3$ profit per coffee and you get the picture; that is 1000 to 1500 $ a day plus all the gravy sales of accompanying pastry..let's stick to 1500 $ /day x 30 days (a typical month) = 45 000 $ a month minus all expenses, it still leaves a hefty 20 000 $ profit per month or 240 000$ annual profit for a small operation, just imagine a medium or big operation!? or better yet multi-outlets..

U don't know the rental here, way higher than US. And the turnover here is very very low, many customers will sit there for at least 2-3 hours with very few choosing takeaway, hence lots of stores are very large with two floors or even 3-5 floors. And it's impossible to make the cost of a cup of coffee 5-10 cents in China.

Everybody in China knows landlords earn more than the coffee shop oweners.

 

[The SC]

U don't know the rental here, way higher than US. And the turnover here is very very low, many customers will sit there for at least 2-3 hours with very few choosing takeaway, hence lots of stores are very large with two floors or even 3-5 floors. And it's impossible to make the cost of a cup of coffee 5-10 cents in China.

Everybody in China knows landlords earn more than the coffee shop oweners.

OK, I do understand the rent and all that, but I still believe that a coffee is very cheap to make and it has a very high profit margin, otherwise, chains like Starbucks will not proliferate as much to cover all China..
Maybe the landlords take a big chunk of it but profits must be quite attractive for the owners also..

 

[AndrewJin]

OK, I do understand the rent and all that, but I still believe that a coffee is very cheap to make and it has a very high profit margin, otherwise, chains like Starbucks will not proliferate as much to cover all China..

The margin per shop is low. So they need to open more. But ultimately it is the landlords who earn the most. Starbucks in China tend to locate in the best spot.

 

[The SC]

The margin per shop is low. So they need to open more. But ultimately it is the landlords who earn the most. Starbucks in China tend to locate in the best spot.

Maybe the landlords take a big chunk of it but profits must be quite attractive or at least worth it for the owners also..

 

[AndrewJin]

Maybe the landlords take a big chunk of it but profits must be quite attractive or at least worth it for the owners also..

Of course they make money.
It's win-win.
Government gets the tax.
Lots of jobs for the low-skill people.
Profits from the poperty.
Customers have very decent space.
Local food supply chain.

 

[Jlaw]

Starbuck. I only drink it when I get it for free.

 

[AndrewJin]

Starbuck. I only drink it when I get it for free.

They do give u free stuff on birthday.
Or every three cups.
They also give u free water, free milk, and quite often let u try new food.
And their shop is way more spacious than branches in the west.
So you can rest there with high-speed wifi, water, milk, without buying anything.

 

[terranMarine]

Starbuck. I only drink it when I get it for free.

Me too, if someone wanna treat me i won't say no to that