Coffee Lovers Face Shortages, Cafes Struggle to Cope! Shanghai's 'Pause' Leaves Coffee Industry in Trouble...

Shanghai's Coffee Culture Under Lockdown

Since mid-last month, various residential communities in Shanghai have begun implementing uninterrupted lockdown management. The sudden lockdown left many coffee enthusiasts unprepared, leading to the phrase "I need to buy coffee" trending on Weibo during the six-hour periods when residents were allowed to purchase supplies. The topic garnered over 340 million views.

This trending Weibo topic sparked widespread discussion about whether Shanghai residents are addicted to coffee, contributing to the city's numerous coffee shops. In reality, not everyone is dependent on coffee—for some coffee drinkers, it's more about habit. Not every coffee drinker needs specialty or freshly ground coffee either. Coffee shops primarily provide social spaces or cater to those who seek specialty coffee experiences.

Early Lockdown Challenges

Since Shanghai began implementing partial lockdowns in some communities, several Shanghai coffee shop owners mentioned in media interviews that due to pandemic impacts in certain areas, they had suspended dine-in services, only offering takeout and delivery. Consequently, their daily revenue suffered to varying degrees.

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However, since large-scale lockdowns hadn't been fully implemented at that time, limited daily delivery orders and support from regular customers picking up orders could still cover operational costs. If large-scale lockdowns were implemented with complete business closures, operational pressure would increase significantly. Coffee shop owners interviewed at that time expressed that even with lockdown management, if it would only last for a few days and restrictions were lifted on schedule, they could continue operating their coffee shops.

The Prolonged Crisis

But things often exceed people's expectations. Due to the rapid rise in confirmed cases, regardless of industry or business type, none were able to resume operations as scheduled. Many coffee shop owners had to face zero income while continuing to pay for rent, labor, utilities, and various material losses. As the saying goes, small amounts add up over time—especially when these amounts are far from insignificant.

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Recently, the author has seen several Shanghai coffee shop owners on social media expressing intentions to transfer their coffee shops after the lockdown, with straightforward reasons: insufficient funds to continue the intense competition... Life must go on, and they cannot afford to pour all living expenses into their businesses. Cutting losses promptly has become their final choice.

Government Support and Its Limitations

Some coffee shop owners noted that although the "Shanghai Municipal People's Government's Several Policy Measures to Fully Combat the Pandemic and Assist Enterprises in Promoting Development" mentioned government measures such as tax reductions and refunds, rent relief, and financial subsidies to reduce burdens on various enterprises and support relevant industries in overcoming difficulties and resuming development, these policies haven't provided significant help for small businesses given the current situation.

One issue is that many small shops lack sufficient working capital to resume normal operations after the lockdown is lifted. In many cases, to offset costs, coffee shops may face a wave of price increases. Another issue is that even when business resumes, major coffee chains will launch promotions to attract customers, making it difficult for small shops to compete with large coffee chains that have strong financial backing.

Future Challenges and Strategies

This is the reality—even with sufficient funds to survive this lockdown, how to stabilize and retain customer traffic becomes a challenge. According to some coffee shop owners, there will be a surge in consumption after the lockdown is lifted, but it won't last long. Moreover, people have started getting used to brewing coffee at home recently, which will also change their consumption habits. Therefore, coffee shops cannot rely solely on beverage sales after resuming operations.

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If they determine they have sufficient funds to survive this lockdown, owners should consider not just attracting consumers through coffee beverage price discounts, but also quickly launching convenient brewing options (such as drip coffee bags) to build brand loyalty, offering promotions on coffee beans, and establishing online sales channels. If everyone focuses solely on beverage price competition, small shops will always suffer. Therefore, when unable to compete on beverage prices, they must find alternative ways to attract and retain customers.

Broader Industry Impact

Beyond Shanghai's coffee shops, coffee shops in other regions have also been affected by Shanghai's lockdown. Many coffee bean roasters' products remain stuck in Shanghai warehouses—with personnel unable to enter and goods unable to exit. Consequently, many coffee bean brands have experienced inventory shortages, and some coffee bean prices have been adjusted accordingly.

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To solve this problem, some green coffee bean suppliers have established "temporary warehouses" in other cities. All air-imported coffee beans are first sent to these other cities and, after inspection by relevant departments, gradually shipped to areas that can receive deliveries, reducing costs associated with storing goods at ports. According to the latest news from Coffee Workshop, the long-awaited first batch of 2022 new season Guji Grade 6 green coffee beans has arrived in Guangzhou.

Looking Forward

During this time, regardless of industry, everyone has faced challenges. What we can do is cooperate with various pandemic prevention measures to help end the pandemic in all regions as soon as possible, allowing everyone to return to normal life quickly.

Image source: Internet

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