Hong Kong-based cafe chain subsidiary Pacific Coffee

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Hong Kong-based cafe chain subsidiary Pacific Coffee plans to open up to 1,000 restaurants in mainland China, bringing it in direct competition with American coffee brand Starbucks (Nasdaq:SBUX), reported Southern Metropolis Daily on October 26 citing Li Ruxiong, vice president and chief financial officer of China Resources Enterprise (0291.HK).

According to Li, the company will open coffee shops in China Resources Enterprise’s high-end supermarkets. According to the report, Pacific Coffee announced plans in July to open 200 locations in mainland China within in 3 years. Pacific Coffee currently has 90 restaurants, three of which are located in mainland China, while Starbucks has 400 stores in 28 cities in China. In my experience, companies like this love to throw out huge numbers to get the market all excited (and often pump up their stocks). But at the end of the day when they fail to meet those numbers, they just keep quiet and largely rely on the media’s short memory so that no one ever calls them to task for failing to carry out their lofty plans.

 

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