Peet's Coffee, hailed as the "godfather of Starbucks," recently closed its first South China location at Shenzhen MixC World. Store employees revealed that while the lease with the mall had expired, some staff members acknowledged that the store "wasn't as profitable as other locations."

This year alone, Peet's Coffee has successively shuttered its Guangzhou flagship store and multiple outlets in prime commercial districts across Hangzhou, Beijing, and other cities. Independent coffee shop owner Hu Peng calculated the economics: in high-end malls, monthly operating costs reach approximately 300,000 yuan per store. With an average ticket price of 40 yuan, stores need to sell 450 cups daily just to break even. The high-cost model of these chain brands now struggles against the flexibility and cost-effectiveness of independent shops.

Consumer behavior has also shifted under the influence of low-price coffee promotions. 2024 research shows that nearly 80% of consumers prefer freshly-made beverages priced between 10-20 yuan per cup, while those willing to pay 25 yuan or more has plummeted to just 4%.

**South China Flagship Closure: Staff Admit "Store Wasn't Very Profitable"**

Following the closure of Peet's Coffee's first South China location, social media was filled with expressions of regret. Customers made special trips on the final day of operation to bid farewell, photographing their last cup as a memento. Some netizens wondered: "This store seemed to have good business - why did it suddenly close?"

The store, located at Shenzhen MixC World, operated for nearly four years from its September 2021 opening until closure, marking Peet's Coffee's first location in South China. The original site now displays new brand construction barriers, and Dianping shows the store as temporarily closed.

A Peet's Coffee representative responded: "The closure of individual stores in the southern region represents routine operational strategy adjustments. These optimizations are based on systematic evaluations of store profitability and asset return models, aimed at improving overall operational efficiency and ensuring more reasonable resource allocation, rather than simple contraction or withdrawal."

One Peet's Coffee employee told reporters that "the MixC World store closed because the mall contract expired." Simultaneously, other staff noted that "this store's profits weren't as high as other locations." Regarding potential future reopenings nearby, multiple employees indicated "no news yet" and that "MixC World staff have been transferred to other locations."

For Peet's Coffee, its premium positioning brings significant operational pressure. Most Peet's Coffee stores are located in core commercial districts, and specialty coffee shops require substantial space investment and renovation costs, plus premium coffee demands high-quality beans, roasting craftsmanship, and skilled baristas, creating inherently expensive cost structures.

Independent coffee shop owner Hu Peng estimates that Peet's Coffee stores in high-end malls have monthly operating costs of approximately 300,000 yuan, mainly including rent, labor, utilities, materials, and miscellaneous expenses, with rent comprising the largest portion. With stable average tickets of 35-40 yuan and normal coffee gross margins exceeding 50%, achieving break-even with 300,000 yuan monthly costs requires at least 600,000 yuan in monthly revenue - meaning approximately 450 cups sold daily, a target increasingly difficult to achieve in today's competitive environment.

**Dubbed "Father of Starbucks," China Expansion Gradually Slowing**

Despite lower name recognition than Starbucks, Peet's Coffee has long been industry-acclaimed as the "Starbucks godfather" or "father of Starbucks," since all three Starbucks founders studied coffee roasting techniques under Peet's Coffee's founder. In 2012, Peet's Coffee was acquired by German investment group JAB for $977 million, launching a new chapter of global expansion.

Peet's Coffee officially entered the Chinese market in 2017, opening its first store in Shanghai, then steadily expanding in tier-one and new tier-one cities with its premium coffee positioning. Currently, Peet's Coffee's store count has reached over 260 locations, with revenue showing double-digit year-over-year growth.

Financial reports from JDE Peet's, Peet's Coffee's parent company, show that over the past five years, detailed disclosure of Peet's Coffee's organic sales growth in China occurred only in 2021 and 2023, both at 19%. Additionally, JDE Peet's revealed that in 2021, Peet's Coffee's China store count doubled from approximately 35 to 70 locations, continuing with 47 additional stores in 2022 to reach 117 total.

However, since 2024, Peet's Coffee has notably slowed its expansion pace. According to Narrow Door Restaurant Eye data, Peet's Coffee continued accelerated deployment in 2023, opening 98 new stores that year. New store openings dropped to 51 in 2024, with only 16 additions in the first half of 2025, representing a significant decrease from peak periods.

Notably, alongside controlled store growth, Peet's Coffee has successively closed multiple locations, including stores in prime tier-one city locations.

Beyond the Shenzhen MixC World store, this year Peet's Coffee has closed its Guangzhou flagship at Teemall, Hangzhou West Lake store, Shenzhen Joy City store, Beijing China World Trade Center second store, and Shaoxing Intime store, among others. The Hangzhou West Lake location, which became an internet-famous destination due to its unique glass house design and exceptional West Lake views, maintained full occupancy year-round, making its closure particularly surprising to consumers.

**Facing 9.9 Yuan Impact: Reports Show Only 4% Willing to Pay 25+ Yuan for Beverages**

According to Euromonitor International data, while the global specialty coffee market is projected to expand at a 9.2% compound annual growth rate through 2028, China's market growth has halved from 25% in 2023 to 12% in 2025.

Hu Peng indicates that China's specialty coffee market is approaching saturation, with increasingly knowledgeable coffee enthusiasts. Consumers with daily coffee needs prioritize quality and affordability, with many independent coffee shops offering superior beans and customized flavors. Compared to the high prices and standardized homogeneity of chain premium brands like Peet's Coffee and Starbucks, these independent shops actually hold advantages.

The closure wave among chain specialty coffee brands is spreading. Besides Peet's Coffee, Seesaw Coffee has closed at least half its stores since 2024, with nationwide locations now under 50; M Stand Coffee, after widespread domestic closures, is seeking overseas expansion; even international renowned specialty coffee brands like %Arabica and Blue Bottle Coffee have faced reported performance pressures in recent years.

Narrow Door Restaurant Eye data shows that as of July 15, nationwide coffee store count reached 228,000, with 68,000 new openings in the past year, but simultaneously 52,000 store closures. During this process, premium-positioned chain specialty coffee brands dependent on "third space" experiences face greater impact due to high and rising operational costs.

From external challenges, budget coffee brands like Luckin and Cotti have completely disrupted consumer coffee price perceptions through normalized 9.9 yuan promotions, while tea beverage brands like Gumeng entering cross-category competition further squeeze specialty coffee survival space.

The "Freshly-Made Beverage Innovation Trend Research Report 2024" shows that regarding price preferences, nearly 80% of consumers favor freshly-made beverages priced 10-20 yuan per cup, while those willing to pay 25+ yuan per cup has dropped to just 4%.

Hu Peng acknowledges, "Starbucks and Peet's Coffee have higher prices, targeting mainly business customers, while brands like Manner and Luckin priced in the 10-20 yuan range can satisfy most consumers' daily coffee needs."

Facing market changes, last year Peet's Coffee quietly opened its first national test store for the more accessible Ora Coffee at Beijing Fortune Plaza, featuring products in the 15-25 yuan price range, with promotional prices as low as 9.9 yuan, adopting a "small but refined" store model to improve operational efficiency.

In July this year, Peet's Coffee implemented "consumption for seating" policies at select locations in Hubei, Zhejiang, Guangzhou, and other areas, explicitly requiring customer purchases before seating to address persistent "occupying seats without consumption" issues and optimize store resource utilization efficiency.

Peet's Coffee's operational status merely represents a microcosm of chain specialty coffee brands under brutal competition. Whether through price segment expansion or operational optimization, the industry's transformation path remains challenging.