China's Consumers Can't Afford or Won't Pay For Haagen-Dazs

China Daily: Haagen-Dazs feels the heat in smaller cities
Rising rents and lower profits have forced General Mills Inc's ice-cream brand Haagen-Dazs to close stores in second- and third-tier cities in China amid a slowdown in the ice-cream market mainly due to a lack of innovation and its inability to keep pace with demand from increasingly sophisticated Chinese consumers.

"We have adjusted our stores in second and third-tier cities due to slower economic growth in those regions," Haagen-Dazs said in an email reply to China Daily on Monday.

But the US ice-cream chain said a "5 to 10 percent adjustment in store numbers" is normal". The brand has 380 stores in 84 cities in the country, despite the challenges at markets in second and third tier cities in the country, according to the email statement.

The company's international sales declined 10 percent in fiscal year ended May 29, and its international segment operating profit slumped 15 percent, mainly due to unfavorable foreign currency exchange rates and slowing economic growth in China and Brazil, according to its annual report.

...Many cafes and coffee shops outperformed Haagen-Dazs thanks to their sophisticated dining environment and rich product availability, she said, adding that a lack of innovative products also caused the decelerating expansion.

The increasing popularity of nitro ice cream and cotton-candy topped ice cream showed that Chinese consumers, especially the younger generations, have a great preference for innovative products.
It's too expensive.

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