Catshanghai

These uncertain economic times have led me to think about how I spend my money on a number of discretionary items including coffee. It seems that drinking coffee is a barometer of the economic climate in terms of confidence and people’s spending habits.

A large cup of coffee at an elegant coffee shop like Starbucks or Costa Coffee sells for approximately 30 RMB depending on your selection. I have been drinking a cup of coffee a day at such places since I arrived in Shanghai four and a half years ago. Let’s say I spend 200 RMB a week on coffee. That adds up to 10000 RMB a year or 45000 RMB during my time in Shanghai. That level of spending seems trivial to an expat like me during boom times, but now it feels extravagant and profligate.

Our first baby is due in four months, and I’m not sure how the economic crisis is going to affect China and Shanghai. I’m trying to cut back a little on personal spending so we have more to spend on the baby and more savings to get us through any difficult spell that we may face if my income suddenly fell. I’m not expecting the worst, but I’m getting ready just in case.

I don’t want to stop drinking coffee and I’m not organised enough to brew my own coffee at 6am when I get up. Still, I may have found a way to make my caffeine addiction cheaper by getting coffee in the mornings from MacDonalds and KFC at 5 RMB a cup. There’s a little bread shop in Songshan Lu called Commune Coffee that serves a semi decent Mocha for 14 RMB. I’ve also drunk a reasonable cup of coffee from the new fast growing Taiwanese chain called ’85 C’. I’ve seen branches in Maoming Lu, Wujiang Lu and Daxing Jie near Lujiabang Lu.

It’s noticeable that the new crop of low priced coffee shops are always heaving with locals whereas a normally busy Starbucks in Huai Hai was empty at 6pm last night. (I broke my rule last night!). Often that branch is so busy that you cannot get a seat. It seems I am not the only person in Shanghai who is downsizing my coffee drinking habits? Fons Tuinstra noted this trend in his recent article from China Herald.

I used to think that the proximity of a Shanghai Starbucks correlated quite strongly quite strongly to the price of a local appartment. We live in Huangpu by Nanpu Bridge, which is a Chinese working class neighbourhood with no Starbucks and cheaper accommodation prices. Travel towards Huai Hai Lu, Xintiandi and parts of Pudong and the price of property is much higher as is the concentration of elegant coffee shops. Now I’m thinking about another phenomenon. Cheap coffee shops will flourish as economic growth slows. Call it the Aldi effect. In the UK supermarket chain Tesco has reported its worse Christmas since the early 1990s whereas low cost Aldi enjoyed a 20 percent surge as ‘as cash-strapped consumers traded down in the face of the credit crunch.’(See this Guardian article)