[Report] 'Byeoldabang' Showdown with 'Kongdabang'... Tearful 'Half-Price Event'

50% Beverage Discount Event at Some Coffee Bean Stores
Started Early This Year, Ongoing Without End Date
Desperate Measure to Survive Amid Starbucks and Low-Cost Competition

"We are offering a 50% discount on beverages."

A Coffee Bean store in Yangcheon-gu, Seoul, hung a large banner announcing a half-price event. Upon entering the first floor and standing in front of the kiosk, all beverages were indeed sold at a 50% discount, priced between 2,000 and 3,000 won. A 5,500 won Americano was 2,750 won, a 6,400 won Caffe Latte was 3,200 won, and a 6,900 won Caffe Mocha was 3,450 won. The new menu item, an Earl Grey Cream Chocolate Latte priced at 5,900 won, was 2,950 won, and the most expensive Caramel Ice Blended at 7,600 won could be ordered for 3,850 won.

When ordering a warm decaffeinated Caffe Latte, the total came to 3,350 won. Normally, choosing decaf at a regular Coffee Bean store adds 300 won, but at this location, that option was also discounted by 50%. A Caffe Latte priced in the 3,000 won range is a price not seen at high-end coffee franchises like Starbucks, Twosome Place, or Hollys. Ordering a decaf Caffe Latte Grande of the same volume at Starbucks costs a total of 6,100 won.

Since the 50% discount started in the summer season and word spread, this store has seen a sharp increase in customers. Despite the presence of nearby Starbucks and Hollys, as well as Mammoth Coffee and individual cafes, the second-floor seating was bustling with roughly over 30 people just after 10 a.m. The age range was diverse, from mothers who had finished the morning school run, to study groups, and elderly customers. An employee at this location said, "Customer numbers have greatly increased since the 50% discount event," adding, "The event's end date has not yet been decided."

According to industry sources on the 5th, Coffee Bean Korea has been running a 50% beverage discount event at some stores since early this year. About 10 locations in Seoul?including Gyeonghuigung Morning, Sangsu Station, H외대앞, Kyunghee University, Sinchon, Seokchon Lake, and Omokgyo Intersection Station?and about 20 locations in Gyeonggi, Gangwon, Gyeongnam, Gwangju, Daegu, Daejeon, Busan, and Incheon are selling beverages at half price.

The event stores are mainly newly opened outlets or located in university areas where foot traffic decreases during vacations, or in commercial districts with intense competition among coffee franchises. Coffee Bean describes the event as a "temporary promotion," but the end of the event has not yet been determined. Since sales have increased as the half-price event spread by word of mouth, it is difficult to announce the end of the discount. Rather, the number of event stores is increasing, and the half-price discount is now applied even on weekends, which were previously excluded.

Coffee Bean's bold discount move is a desperate measure amid the rapid growth of industry leader Starbucks and the flood of low-priced franchises. Coffee Bean was once a franchise that stood shoulder to shoulder with Starbucks, known as "Kongdabang," in the early 2000s. However, it has now lost so much prestige that it no longer ranks among the top five in the industry.

In fact, Coffee Bean's sales, which reached 126.7 billion won in 2010, peaked at 166.6 billion won in 2018, then entered a downward trend, recording 158 billion won last year. Considering inflation, this means it has effectively not grown for over a decade. The number of stores has also been steadily decreasing since 2019. From 291 stores in 2019, it dropped to 278 in 2020, 256 in 2021, 241 in 2022, and is around 220 this year.

Meanwhile, Starbucks, once considered a rival, has been thriving with sales increasing from 241.6 billion won in 2010 to a record 2.5939 trillion won last year. The number of stores was 1,870 as of October last year.

As a "premium brand," Coffee Bean lost public favor due to policies prohibiting outlets and Wi-Fi, falling behind Starbucks, and on top of that, it lost ground to the invasion of low-priced coffee. According to Statistics Korea, the number of coffee specialty stores in Korea surpassed 100,000 for the first time at the end of 2022, reaching 100,729, a 4.5% increase from the previous year (96,437). In particular, low-priced brands such as Compose Coffee, Mammoth Coffee, and Mega Coffee have rapidly expanded, intensifying competition among franchises day by day.

Coffee Bean's 50% discount event is essentially an unavoidable strategy for franchise survival. However, while the short-term sales boost from the flash discount is positive, there are criticisms that it exposes Coffee Bean's struggling situation and causes significant damage to the brand image. One consumer said, "The half-price discount lasting longer than expected is good, but I also worry that the stores might soon disappear," adding, "Just in case, I have used up all the balance on my Coffee Bean card."