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Starbucks Faces a Relentless New Rival; Is Dubai Chocolate the Next Pumpkin Spice?; Luxury Brands Are Getting Hit by a Vibe Shift
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Welcome back. Today, Luckin arrives from China to try its formula in the U.S.; internet trends force food brands to act fast and stay nimble; and expensive labels face a confounding consumer pullback.
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Luckin’s first stores in the U.S. are showing off its mobile app and low prices, areas where Starbucks has struggled. Photo: Christian Monterrosa
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China’s biggest coffee chain has entered the U.S., setting up a potentially epic rivalry with Starbucks, Hannah Miao and Heather Haddon report.
Luckin has just two U.S. stores, which opened June 30 in Manhattan, compared with Starbucks’s 17,000. But Luckin didn’t exist when Starbucks brought coffee culture to China—and it overtook Starbucks in six years.
The chain was founded by Chinese ride-hailing entrepreneurs who made gamification a key strategy. Customers must order its flat white coffee, raspberry cold brew and everything else through its app, which showers them with coupons.
Customers get a text when their drinks are ready and grab them at the counter without having to interact with anybody.
“This is just the beginning,” Luckin said on Instagram. “NYC, we’re here.”
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Content from our sponsor: Deloitte
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Marketing Budgets Rise but Lag Inflation
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New research explores marketing investment trends and identifies strategies that are paying off for CMOs to drive business growth. Read More
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The Dubai Chocolate Debate
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Sarah Hamouda, co-founder of the Dubai chocolatier where she sparked the trend now called Dubai chocolate; Shake Shack’s limited-run Dubai Chocolate Pistachio Shake. Fix/Deliveroo; Shake Shack
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Food brands including Crumbl, Trader Joe’s, Aldi, Lidl, Shake Shack and Dunkin’ Donuts are churning out products with Dubai chocolate, a chocolate and pistachio combo that has set social media on fire, Owen Tucker-Smith writes.
Now the question is whether the sensation will last, making Dubai chocolate a staple like pumpkin spice or salted caramel, or fade away like dalgona.
Marketers trying to make that call look partly at whether people who sample a trend return for more. But there’ll be some other craze to evaluate soon.
“It’s undeniable that the internet has accelerated the pace at which flavor profiles emerge, spread and evolve,” said Crumbl co-founder Sawyer Hemsley. “We’ve seen firsthand how what might’ve once taken years to catch on, can now reach global audiences in a matter of weeks.”
Related: McDonald’s blamed runaway social media for Snack Wrap sales that exceeded its projections enough to cause ingredient shortages. [Restaurant Business]
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“My one request is that we make it illegal for AI models to offer advertising.”
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— Entrepreneur Mark Cuban after the White House unveiled an “AI Action Plan” criticizing “burdensome” regulations. “They are already recommending brands and we don't know if they are getting paid for it,” Cuban said of AI chatbots. “We need to have learned our lessons from algos in social media.”
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Second-quarter sales at LVMH’s crucial fashion and leather goods division fell 9% from a year earlier, continuing a trend. Source: LVMH
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Something feels off in luxury, Carol Ryan writes.
Sales across the industry are likely to be flat in 2025, after 2024 delivered the sector’s worst performance since the 2008 global financial crisis. The industry normally expands at twice the rate of global economic growth.
Some challenges, such as any hangover from consumers’ luxury binge in the pandemic, may clear up on their own. But others might require a response.
Shoppers have diverted spending away from handbags, for example, after prices went off the rails. Younger consumers appear disillusioned by viral stories about extreme markups and abuses in the supply chain.
And people are tuning out the brands online. Their growth in social-media followers is flatlining, while engagement is less than half its level in 2022.
More: Made-in-China luxury brands such as Laopu, Mao Geping and Songmont are winning over Chinese customers with a pitch that combines locally inspired designs and cultural pride. [WSJ]
LVMH is in talks to sell Marc Jacobs in a deal that could fetch around $1 billion. [WSJ]
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Electronic shelf labels are spreading at grocery chains in Europe and the U.S., enabling instant price drops—and raising fears of surge pricing. Illustration: Tim Alexander
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Grocery shoppers in Norway are used to seeing prices change in front of their eyes. How long until dynamic prices come to the U.S.? [WSJ]
Astronomer, the IT company whose executives were caught on Coldplay’s kiss-cam, seized its moment in the spotlight with a video starring Gwyneth Paltrow as a “temporary spokesperson.” [THR]
Citigroup’s new Strata Elite card targets frequent travelers with a straightforward rewards system, the latest salvo in banks’ battle for affluent customers. [WSJ]
Business-to-business influencers often aren’t making the required clear disclosures. [Ad Age]
YouTuber Tim Pool gained a following by bashing mainstream media. Now he’s asking questions in the White House press room (and still bashing mainstream media). [WSJ]
“KPop Demon Hunters” suggests that K-pop could be the key to Netflix’s key to challenging Disney for families. [BI]
Defunct sports franchises including the Sonics, Expos and Whalers have surprisingly active social-media feeds. [Front Office Sports]
It’s getting harder to find entry-level roles at many ad agencies as reorganizations and AI take their toll, but these private equity-backed independent shops are hiring. [Adweek]
If you were wondering what we were going to call people who ChatGPT everything in their lives, good news, someone coined a term: sloppers. [Today in Tabs]
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