Beijing Competitor Luckin Coffee Gobbles Up New York Leases After Starbucks Closes Locations

New York City's coffee wars have entered a ruthless new phase, marking a stunning reversal of fortune for the incumbent heavyweight. The familiar green mermaid has owned Manhattan's street corners for decades, but her grip on the city is finally starting to loosen.

As Starbucks quietly retreats by boarding up windows and vacating prime real estate, a fast-moving rival from Beijing is waiting in the wings to take over that space. Luckin Coffee is not merely observing the American giant's stumble; it is aggressively moving to occupy the very ground Starbucks has abandoned, with brokers confirming the Chinese chain is actively eyeing the newly empty locations.

Starbucks Retreats Further as Five More NYC Stores Face Closure

The rapid contraction of Starbucks' footprint in the city shows no signs of slowing down. Following a jarring purge in the autumn, the chain is poised to shutter another five locations in New York City early next year. This insight comes from James Famularo, president of Meridian Retail Leasing, who noted the trend of landlords losing their most reliable coffee tenant.

Another real estate source familiar with the situation confirmed that these closures are imminent, attributing the move to leases simply not being renewed. 'I don't see Starbucks ever opening as many stores in NYC as they closed,' the person told The Post.

This follows a brutal quarter for the coffee giant. On 25 September, 34 locations abruptly ceased operations after the company suffered six consecutive quarters of declining sales. The total tally is stark: according to the Center for an Urban Future, Starbucks closed 42 stores in New York City over the course of the year, more than any other chain retailer. There are now 286 locations across the five boroughs, a significant drop from the 351 that operated in 2019.

Beijing Rival Luckin Coffee Rapidly Expands into Abandoned Spaces

While the American chain pulls back, its Chinese rival is on an aggressive offensive. Luckin Coffee, which already operates more than 26,000 stores globally, is actively looking to expand its presence in the Big Apple. After opening nine stores in just seven months, the company is zeroing in on the specific real estate Starbucks has left behind.

Brokers working with the company indicate that Luckin is eyeing numerous locations, specifically the smaller to-go spots that do not fit Starbucks' new strategy. The Beijing-based chain, known for selling drinks about 30% cheaper than its Seattle-based competitor, previously trampled Starbucks when establishing dominance in the Asian market and appears ready to replicate that success in the US.

'There are a lot of negotiations going on involving Luckin,' Famularo said, noting the intensity of their search. 'More than a dozen spaces we represent are being looked at by Luckin. It wouldn't be surprising if a year from now Luckin has quadrupled its spaces. They are that active.'

Strategic Shift Sees Starbucks Pivot to Larger Social Spaces

In contrast to Luckin's grab-and-go efficiency, Starbucks is attempting to return to its 'third place' roots. The company is investing in locations where customers are encouraged to linger, socialise, or work on laptops. To that end, the chain is reopening a shop at 1585 Broadway in Manhattan, which had closed during Morgan Stanley's renovations.

However, sources indicate this is an outlier. 'We regularly evaluate our portfolio of coffeehouses to make sure that we are meeting the needs of our customers. 'Opening and closing stores is a standard part of our business,' Starbucks spokesperson Sam Jefferies said in a statement to The Post. Despite this assurance, no other openings are currently in the pipeline.

Landlords Left Scrambling After Sudden Overnight Closures

The retreat of Starbucks has sent shockwaves through the local real estate market. For years, the chain was viewed as a blue-chip tenant that guaranteed rent payments and drove heavy foot traffic to neighbourhoods. That reputation was damaged in September when the company exited dozens of leases with virtually no notice.

'They literally put signs in windows overnight without telling landlords and building managers,' Newmark Retail Vice Chairman Jeffrey Roseman told The Post at the time. 'There was no warning, no heads up.'

The closures are part of a massive restructuring plan costing roughly £790 million ($1 billion), which included closing 400 stores nationwide and laying off 900 corporate staffers. Experts suggest the struggling chain never fully recovered from the pandemic, as office workers replaced daily coffee runs with home brewing or office perks.

'If you were a Starbucks customer who went to a store five days a week, maybe you go now three days,' said the real estate source. 'Stores that used to be profitable lost business. That all adds up and is significant.'