First Starbucks to open in China closes its doors

Escalating real estate prices are creating headaches for business and citizens alike.

Last Friday, the first Starbucks to open in China closed its doors. While the company indicated it simply intended to move to a different location nearby, to Chinese bloggers, the closing of the location, on the bottom floor of the China World Shopping Mall, was more than simply a relocation.

According to the Financial Times (paywall), rising rents that have plagued Chinese residents may have played a role in the decision. Despite government efforts to curb skyrocketing real estate prices, many Chinese can no longer afford to rent or buy homes. Prices have remained high. Wrote one blogger (in Chinese): "If Starbucks couldn't manage to stay on, how can regular people afford to?"

Earlier this year, Starbucks announced its intention to have 1,000 stores in China by the end of this year (at the moment it has more than 750). The majority of these stores are concentrated in big cities, such as Beijing, where rents for commercial property increased 23% in May alone, compared to 15.2% for residential properties. At rates like these, it may be difficult for Starbucks to meet its goal.

Photo: Flickr/Giorgio Minguzzi

via [Quartz]

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