There has been the rapid expansion of coffee chains in many countries, with some people believing that it poses a concerning threat to the survivability of local cafes. I agree that this notion has several detrimental impacts on local economy.
It is widely acknowledged that multinational companies dominate the market through a brand identity. In other words, individuals often associate these types of global brands with prestige, meaning they have strong tendencies to purchase products from these prominent stores to flaunt their status. In many European countries, customers usually buy coffee from renowned brands, especially Starbucks, for example. The purpose for this transaction is not only the preference for the taste, but also an opportunity to be recognized as a high-status individual. Myriad of social media posts portraying a person holding a Starbucks’ cup further prove this tendency. With this kind of profound appeal, it is unlikely that local cafes could attract customers to maintain their businesses.
Another reason why local business sector may struggle to compete with large enterprises is the substantial disparity in products’ costs. Thanks to a high-end automation and a direct import system from agricultural lands, coffee chains has successfully managed to lower their prices significantly. On the contrary, retaining competitive prices appears to be impractical for small businesses without compromising their service quality as both radical options, such as shortening staff members or importing from cheaper manufacturers, are likely to affect overall customer experience adversely. Thus, far from alluring potential coffee-enthusiasts, this step, in fact, may induce having relatively lower conversion rates in local coffee shops, thereby resulting in the demise of their businesses.
In conclusion, the increasing number of coffee branches is becoming widespread in many countries and I contend that it brings significant challenges to local cafes to survive due to unfair advantages global chains possess over their counterparts in terms of status and price.