US coffee chain lowers prices to boost afternoon sales in China
Starbucks (NASDAQ: SBUX) announced on its official WeChat account Monday that it will reduce prices for certain iced beverages in China, with average price cuts of 5 yuan (approximately $0.70) per drink.
The price adjustments, set to take effect Tuesday, represent the company’s latest effort to strengthen its “all-day” service concept in the Chinese market, particularly targeting increased customer traffic during afternoon hours.
Strategic Price Adjustments
The price cuts apply to select iced drink offerings, though Starbucks has not specified which exact beverages will be affected. The move comes as the company seeks to:
- Enhance price competitiveness in China’s crowded coffee market
- Drive higher afternoon sales volumes
- Attract price-sensitive consumers without compromising brand positioning
Market Context
China represents Starbucks’ second-largest market globally, with the company operating over 7,000 stores across the country. The price adjustments follow recent industry trends where coffee chains have implemented targeted promotions to maintain market share amidst intensifying competition from both international and domestic players.
Consumer Impact
The 5-yuan reduction (about 10-15% of typical iced drink prices) makes Starbucks’ offerings more accessible during afternoon hours when sales typically dip compared to morning peak periods. This strategy aligns with Starbucks’ broader goal of transforming stores into “third-place” destinations for extended customer stays.
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