One out of 10 coffee shops in South Korea incurred losses amidst ongoing expansion: report
The market segment is expected to increase up to US$7.3b by 2023.
Ten percent of the 71,000 coffee shops in South Korea have incurred losses amidst continued expansion, according to data from KB Research Institute.
As reported by Retail in Asia, from 2011 to 2016, coffee store openings increased by 10% each year from 2011 to 2016.
The report also noted that 14,000 new stores opened, outnumbering the 9,000 that closed down.
However, data revealed that the start-up rate of coffee shops fell by 22%, whilst rate of shutdown rose by 14.1%. Over half of the stores which closed down last year operated for less than three years.
The KB report cited another report from Statistics Korea which showed that coffee stores’ sales increased by 10.1% year-on-year to ₩7.9t ($6.7b) in sales in 2017.
According to the report, the coffee store market is estimated to be worth around ₩8.6t ($7.3b) in 2023 up from ₩6.8t ($5.8b) in 2018.
Read full report here.
