Starbucks to move first China's store

Starbucks Corp on Wednesday denied media claims that high rental and labor costs had forced the company to close the first Starbucks in the Chinese mainland at China World Trade Center (CWTC) phase I, a building located in downtown Beijing.

The company said in an e-mail to the Global Times Wednesday that the store will be moved to a bigger location at CWTC phase III in order to provide customers with a better in-store experience.

All the staff at the current store will continue to serve at the new store, according to the company. An employee at the old store told the Global Times that the store will remain open until Friday morning.

A program on China National Radio reported Tuesday that high rent and rising labor costs could be the reasons behind the company's decision to close its first store on the mainland.

Yang Shaofeng, general manager of Beijing Lianda Sifang Real Estate Brokerage, said that commercial rents and labor costs have played major roles lately for mid-level and low-end catering enterprises, and increasing rents are hampering the expansion of the sector.

Media reports said that Starbucks Corp's second-quarter revenue increased by 22 percent to $213.6 million in China and Asia Pacific, a 6 percent share of its total revenue.

Starbucks opened 147 stores in China and Asia-Pacific in the second quarter of 2013, 64 more than in the same period the previous year.

But Starbucks' dominance in China has been challenged recently as the Chinese market welcomes more coffee brands such as Costa Coffee, which has opened over 200 stores in China since its arrival in 2006.