China’s largest coffee chain brand Luckin is closing down 80 stores in Beijing this year, meaning that the Starbuck’s rival in China will close one fifth of its stores in Beijing, according to Jiemian News, citing a Luckin employee familiar with the matter.
The employee said that this decision is made after the Spring Festival, when the accounting scandal is not yet disclosed. “It was because a handful of Luckin stores in an area serve the same consumer group,” said the person, adding that “But the scandal disclosed on April 2 even made Luckin coffee stores rise in sales, so that many stores waited until mid April to close down.”
Meanwhile, the coffee chain brand is still sprawling, but at a slow pace. Alternative data platform Thinknum said that Luckin is opening 10 outlets a day across China in the second quarter as of May 12, bringing its total number of stores to 6,912.
But two employees of Luckin in Beijing and Shenyang denied the data. A Luckin store manager said that the coffee brand developed a strategy to “open one new store when close down three old ones” — three stores that are low in sales volume and one prospective store.
Luckin Coffee has no response to the mass close down of stores up to now.