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Expanding in China: Starbucks doubles retail capacity

17 May 2018

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

Now, the firm says that it aims to nearly double the number of coffee shops it has in the world's second-largest economy.

Starbucks is looking to leverage the worldwide coffee alliance it recently announced with Nestle in order to provide even more options at home for the consumer in China in the near future, said the company through a prepared statement released at the time the alliance was announced earlier this month. The company (Seattle-based) is also expecting to double more than its operating profit in China by the end of the fiscal year of 2022.

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

Starbucks Corp has unveiled a bold plan to more than triple revenue in China over the next five years, CEO Kevin Johnson said in an interview in Shanghai on Tuesday.

There are now around 3,300 Starbucks locations in China, which means the company is looking to almost double its overall store count over the next four years. "We are not immune to it, but we take a long-term view".

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Today Starbucks now has around 3,300 stores in China and it aims to increase this to 6,000 by the end of 2022. Revenue in China and the Asia-Pacific region jumped 54% last quarter compared with the same period a year earlier, according to Starbucks' latest earnings report. Yum China Holdings Inc, which separated from Yum!

In May, Starbucks entered into a deal with Swiss food giant Nestle, the largest food and beverage company in the world, to give the company the exclusive rights to sell packaged coffees as well as teas from Starbuck across the globe.

Nestle's relationships with distributors, giving it access to 1.5 million outlets in China, "dramatically accelerates our ability to bring those coffees to market", said Mr Johnson.

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Now, 60 per cent of transactions in its China stores are through mobile payment.

Expanding in China: Starbucks doubles retail capacity