Starbucks Korea to join the delivery fray

Starbucks Korea, the nation’s largest coffee chain, has jumped into the delivery fray, in its attempt to boost annual sales in South Korea to 2 trillion won (US$1.86 billion).

Expanding aggressively its number of stores here, Starbucks Korea has kept growing its presence with its net profit rising 18.5 percent in 2019 from a year earlier, while sales came in at 1.8 trillion won last year, on the cusp of reaching the 2 trillion won milestone.

The COVID-19 pandemic, however, has served as a bump in the road, slowing the coffee giant’s bid to grab the coveted 2 trillion won title.

Industry watchers say Starbucks Korea’s decision to enter the delivery service might be its longer-term preparation for the aftermath of the pandemic, which has wreaked havoc on the food and beverage industry.

Chairs and tables are moved to a corner at a cafe in Seoul on Nov. 23, 2020, as toughened social distancing rules are to only allow takeout and delivery sales at the place.

Starbucks Korea plans to open a delivery-only store in Gangnam District, Seoul on Nov. 27 as part of a pilot project, and following analysis into demand, it is likely to open another such store in Gangnam District in the middle of next month.

The delivery-only store has no space assigned for visiting customers, only coffee making stands and a waiting room for delivery persons known as riders.

In the meantime, other major coffee brands in Korea such as the Coffee Bean & Tea Leaf, Hollys Coffee, Caffe Pascucci and Ediya Coffee are already operating their own delivery services, so they are likely to keep a keen eye on the possible impact Starbucks Korea’s move might result in.