Starbucks Korea reclaims coffee market lead after 5-month slump
Summary
Starbucks Korea reclaimed the top spot among coffee chains in September after five months of consumer backlash over a marketing controversy. Its estimated credit and debit card spending reached 121.08 billion won, while Twosome Place recorded 110.5 billion won. Starbucks had trailed Twosome for four consecutive months after spending fell to 100.39 billion won in June. The recovery followed the gradual resumption of marketing activities.
Key Facts
- Starbucks Korea’s estimated card spending rose 4.3 percent from August to September, reaching 121.08 billion won.
- Twosome Place’s estimated card spending fell 6.4 percent to 110.5 billion won in September, about 10.58 billion won below Starbucks Korea.
- SCK Company reported an operating loss of 18.4 billion won in the second quarter, compared with an operating profit of 40.3 billion won a year earlier.
- SCK Company’s second-quarter sales fell 6.1 percent to 747.3 billion won.
- Estimated September card spending declined 3.2 percent at Mega MGC Coffee and 6.4 percent at Paik's Coffee, while the data excluded payments made through other methods.
People walk into a Starbucks store in Seoul, Sunday. Yonhap
Starbucks Korea reclaimed its lead among coffee chains in September, five months after a marketing controversy sparked consumer backlash.
According to data from market tracker IGAWorks on Sunday, the coffee chain recorded 121.08 billion won ($90.1 million) in estimated credit and debit card spending last month, up 4.3 percent from August, overtaking rival Twosome Place to reclaim the top spot.
Starbucks trailed its rival for four consecutive months as its estimated card spending dropped by 13.13 billion won to 121.19 billion won from April to May, before bottoming out at 100.39 billion won in June.
The coffee chain's estimated card spending then rose for three consecutive months, reaching 110.06 billion won in July, 116.12 billion won in August and climbing back above 120 billion won in September for the first time since the downturn.
Twosome's estimated card spending fell 6.4 percent from August to 110.5 billion won in September, about 10.58 billion won below Starbucks.
The recovery follows nationwide backlash over a Starbucks promotion that dubbed May 18, the anniversary of the 1980 Gwangju Uprising, “Tank Day” to market its tumblers, drawing criticism for insensitivity toward victims of the military crackdown.
The campaign sparked calls for a boycott, prompting its parent company, Shinsegae Group, to dismiss the CEO of the coffee chain’s operator, SCK Company, while the group’s chairman, Chung Yong-jin, issued a public apology. The company suspended its summer promotional events and delayed new product launches, gradually resuming marketing activities in June and July.
SCK Company reported an operating loss of 18.4 billion won in the second quarter, compared with a profit of 40.3 billion won a year earlier, while sales fell 6.1 percent to 747.3 billion won.
Meanwhile, the estimated card spending in September at Mega MGC Coffee and Paik's Coffee also declined, falling 3.2 percent and 6.4 percent, respectively.
The figures are based on credit and debit card transactions and do not capture sales made through other payment methods.
Explore More
- Q.
- Q.
- Q.