Starbucks gets spooky with Chinese ghost stores
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Starbucks gets spooky with Chinese ghost stores

Starbucks, the world’s coffeehouse market leader, is working hard to retain (and extend) its top-dog position. One of the priorities in doing that is focussing on deliveries – a powerful trend in the restaurant space, as younger consumers look to have food and drink delivered right to their doorstep (or office). In a decisive move forward, the company is experimenting with “ghost stores” – kitchens that are not open to the public and exist solely to fulfil delivery orders. If it proves successful in the east, it could well make its way to the west.

Starbucks’ share price has risen by 30% so far this year

Starbucks June 13th

Source: Yahoo Finance

Starbucks recently confirmed to Nation’s Restaurant News that it’s been using testing ghost kitchens in partnership with Alibaba – China’s biggest online retailer and a major force in global ecommerce. A spokesperson said that the ghost kitchens were operating at Alibaba’s Hema supermarket locations, adding: “Starbucks is the first retail brand to establish dedicated back-of-house kitchens, Star Kitchens, within Alibaba’s Hema supermarkets in China.”

The lack of a “front-of-house” facility, seating area, and extended staff for serving customers, frees up workers in a ghost kitchen to focus solely on processing requested food and drink items. In that way, it’s a more effective way to do as much business as possible in busy areas where real-estate space is limited and the population is dense. That makes China the perfect place to trial the scheme -and it could easily be transported to western cities with similar constraints, like NYC, Boston and San Francisco.

Disclosure

Dominion holds Starbucks in its Global Trends Managed Fund.


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