Starbucks Korea may face a 1.91 billion won (US$1.59 million) loss after temporarily closing over half of its coffee chain in Daegu Metropolitan City and North Gyeongsang Province, where 90 percent of cases of the new coronavirus in Korea have been confirmed.
The American coffee franchise did not provide an estimate of expected losses, but it can be roughly calculated by dividing last year’s revenue of 1.8 trillion won by 1,387 stores it operated throughout the 12 months period.
Starbucks Korea said it can extend the temporarily closing period in two regions if the virus situation continues to get worse but it will not shut the stores permanently.
The American coffee franchise said on 9th March it will temporarily close down 39 out of 74 stores in the two regions for 13 days until 22nd March. Among them, nine stores have already been shut down since late February and the Korean branch office has decided to extend the closing period.
The remaining 35 outlets are mostly drive thru stores and they will carry out disinfection work at the venues regularly.
Starbucks Korea will also test a new “keeping social distance” campaign at the stores where they will rearrange tables and chairs to keep customers and staff further apart than before.
Customers at all Starbucks stores will be required to wear a face mask during the visit and make sure they throw away paper straws after using them.
“We have decided to temporarily close down some of our stores in Daegu and North Gyeongsang Province as part of our moves to prevent further infection and encourage our customers to participate in the ‘keeping social distance’ campaign. The stores are scheduled to reopen two weeks later but our plan can change depending on the situation of virus spread,” a Starbucks official said.
The American franchise’s Korean branch established a task force in January to cope with the worsening situation of the novel coronavirus in the country.
As of 10th February, all employees working at Starbucks coffee shops are obliged to wear a face mask. The Korean branch has also shortened business hours at certain stores while providing drinks in paper cups at customers’ request.
All the stores in Daegu and North Gyeongsang Province are going through regular disinfection work once a week since the government’s recent decision to raise the alert level for the epidemic to “highest.” Starbucks Korea will also extend expiration dates for e-coupons that are set to expire after 23rd February to 31st May.
Meanwhile, the country’s biggest coffeehouse chain Ediya Coffee has also closed 88 stores across the country.
Many franchises are feely adjusting their business hours according to their individual situation.
The coffeehouse said it saw a 26 percent plunge in sales as of 26th February but decided to exempt two months of royalties for all store owners in the country while providing a free box of coffee beans to aid them.
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Lotte Group’s coffee franchise Angelinus also closed down 30 stores temporarily across the country due to the spread of virus.
(Source: Korea Times)