Japan’s coffee-chains are among the many global businesses affected by the pandemic. Numerous outlets have been shut down due to the change in lifestyles of the people on top of the surging worldwide coffee prices.
According to Shukan Jitsuwa, a Japanese weekly tabloid magazine, on the 24th of February, the total number of outlet closures in 2021 reached 100 for the very first time. The number represents a 26.5% increase, year-on-year.
As the pandemic required people to work from home, a large part of the customer base for the coffee shops evaporated, leading to many to close.
The change in lifestyle is the primary reason for these closures, based on a quote by a business consultant. People in Japan used to use coffee shops for “business discussions, or to take away the time between meetings, to study, or for use by the so-called ‘nomads’ who perform jobs away from their offices.”
As the pandemic required people to work from home, a large part of the customer base for the coffee shops evaporated, leading to many to close.
On top of that, global coffee prices have been rising, due to the production-drop in Brazil caused by unfavourable weather conditions, combined with a surge in demand for coffee in the US and Europe. A source at a trading firm predicts that “the price of coffee beans may double or triple this year.”
This price increase adds more pressure to already affected small and medium-sized businesses like Tokyo-based Nippon Restaurant System Inc. The company, which runs the coffee chain Doutour, reported a loss of 921 million yen (approximately USD 7.97 million) in the period of March to November last year. Another local coffee chain Saint Marc Cafe, reported a 2.79 billion yen loss (approximately USD 24.1 million) in the period of April to November last year.
Japanese coffee-chains, will likely have to adopt new marketing strategies and find ways to attract a new customer base if they are to survive.
