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Starbucks’s rival The Coffee Bean & Tea Leaf plans to open 100 more shops, in New York, ramping up the coffee war. The Los Angeles-based company has 1,200 locations countrywide.
The new shops will be open as franchise locations over the next ten years. This year, the chain plans to open its first locations in Manhattan. The chain’s John Fuller unveiled that the “aggressive” growth is required to keep up with international shops.
Most of the Coffee Bean & Tea Leaf’s shops are located in Asia, while in the United States, 95% of its cafes are located in Southern California. The company refused to offer details on its sales.
The company’s decision to expand to New York is an inspired move as the Big Apple plans to become a tenant’s market once more. Lower rent prices could lure in more Millennials.
Businesses Waiting for NY Rents to Go Down
Rents went down between 2008 and 2009, saw a spike in 2012, and started to decline again today. When rents are too high businesses find it hard to open new locations as it is hard to keep expenses in check.
Analysts noted that last year when the real estate was struggling to find new tenants because of the astronomical price, the only businesses that kept “the lights on” were fast-food chains like Chipotle.
New York now has an empty-storefront problem that brokers are trying to address. So, lower rents could mean more businesses in the market.
In the meantime, Starbucks’ sales have slumped in the United States. The coffee giant currently has 14,000 shops in the U.S. In 2019, it plans to shut down 150 cafes, which is a significantly larger number than the usual number of company-owned shops it shuts down every year.
Starbucks closes the stores because they are simply cannibalizing one another.
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