Starbucks waits for Chinese market to recover

On February 2, Starbucks released its financial report for the first fiscal quarter of 2023 as of January 1, 2023. During the reporting period, Starbucks’ consolidated net income rose 8% to $8.7 billion, a company record. However, Starbucks’ international same-store sales fell by 13% year-on-year, of which China’s same-store sales fell by 29%, and same-store sales in December 2022 alone fell by 42%. If the Chinese market is not considered, Starbucks’ same-store sales in the international market can achieve double-digit growth. Starbucks has shown a good recovery in the Chinese market in 2021, but 2022 will not be easy. As Starbucks’ second largest market, China will be a key contributor to Schultz’s final chapter at Starbucks. | Related reading (Ben Lunch Finance)

Audrey Jing

Starbucks’ frustration in China has been going on for a long time. Instead of “waiting”, it is better to actively seek change. As a coffee lover for many years, I became a diehard fan of Starbucks ten years ago, switched to Ruixing five years ago, and then domestic and foreign brands such as Peets, Manner, and M Stand have blossomed in the past two years. I rarely buy Starbucks anymore.

The pattern of the domestic coffee market has undergone qualitative changes in recent years. It has to be said that Ruixing’s initial promotion of cultivating Chinese coffee habits has really come true now. I personally think that the expansion of the domestic coffee market share must be due to Ruixing. However, although the cake is getting bigger, Starbucks’ growth share has not been able to deliver a satisfactory answer. This means that Starbucks’ market operations no longer meet the needs of the current domestic market! Competitors are scrambling to launch new coffee products with lower prices, higher frequency, high quality and low price, and the online order interface is simpler and more convenient, so why not attract more consumers? Therefore, Starbucks, once the big brother of coffee, really needs to conduct in-depth research on the current coffee habits of Chinese consumers, and actively seek changes from within to deal with market changes.

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