Starbuck Plans 3000 New Stores in China

Henrietta Strickland
May 17, 2018

Starbucks operates approximately 3,300 stores in 141 cities in China and employs 45,000 employees. "China has an extensive runway of opportunities for Starbucks".

Starbucks said as well that it is expecting to more than double operating incomes for China over the upcoming five years, relative to that figure in 2017. "We are not immune to it, but we take a long-term view".

The coffeehouse chain recently raised over $7.15 billion through a deal with Nestle SA, is aiming to have more than 6.000 stores in China before the end of 2022.

Starbucks Corp is looking to more than triple its revenue and nearly double its store count in China over the next five years, doubling down on the market as traffic growth comes under pressure in the United States.

About 15 percent of Starbucks' revenue came from the Chinese and Asia-Pacific markets - about US$3.2 billion - in fiscal 2017, company data compiled by Bloomberg showed.

The Seattle-based firm is facing increasing pressure in the United States from high-end coffee shops and cheaper rivals and so it has turned its attention to the lucrative Chinese market.

While brand new locations could be added by Starbucks at a faster pace due to the increasing demand in China, the coffee giant set its limitations regarding expansion to remain consistent regarding the store quality, Kevin Johnson, Chief Executive Officer in an interview on Tuesday told Shanghai. Customers these days prefer shopping while sitting at home.

Starbucks is shaping up an aspiring plan to compete in the race with KFC to become the quickest-growing foreign food chain with the unfolding of 600 new stores every year thus tripling the revenue by 2022.

In China, where cafe culture is less mature, but e-commerce more developed, Starbucks cafes have cornered the market on plush, but casual meeting spots. It is a significant increase on the company's earlier goal of around 500 a year.

The chain also bringing a new line of pre-made cold tea as well as coffee to China next month.

Other reports by Click Lancashire

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