Starbucks Ramps Up China Plans, Will Nearly Double Store Count By 2022


Same-store sales growth in China locations rose 4% vs. a year earlier in fiscal Q2 vs. 2% in the USA and worldwide.

The thrust as the second-largest economy in the world occurs as its stores in the U.S counter vicious rivalry from upcoming territorial coffee houses and favorable discounting from competing fast-food chains.

This would amount to opening roughly 600 new Starbucks a year in China, or one every 15 hours, which would mark a considerable increase over the company's previous goal to build around 500 a year.

Starbucks also said it expects to more than double its operating income in China over the next 5 years, relative to 2017.

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"China has a long runway of opportunity for Starbucks", Johnson said as the chain kicked off a two-day investor conference in Shanghai, the first to be held outside of the US.

While Starbucks could add new locations at an even faster pace because of the demand in China, the coffee giant is limiting expansion to maintain store quality, chief executive Officer Kevin Johnson said in an interview in Shanghai on Tuesday.

The Seattle coffee chain on Wednesday announced plans to build almost 3,000 new stores in mainland China over the next few years. "We are committed to long-term investment in China".

Today Starbucks now has around 3,300 stores in China and it aims to increase this to 6,000 by the end of 2022. Yum China Holdings Inc, which separated from Yum!

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The push in the Chinese market comes as its stores in the United States face fierce competition from up-and-coming regional coffee houses and steep discounting from fast-food rivals. Consumers also are shopping more at home, shunning brick-and-mortar retail for e-commerce.

While the same sales of the stores in the U.S. have not reached the expectations, robust performance in the new stores in the Stateside means its business is on track again for delivering the anticipated rate of growth in the U.S., Johnson said.

The corporate is flush with money, having sold Nestle (NSRGF) the rights to promote Starbucks-packaged tea and occasional world wide for $7.2 billion earlier this month.

Currently, 60 percent of transactions in its China stores are through mobile payments.

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