Retail Express
Starbucks to open 3,000 new stores in China despite falling sales from COVID lockdowns
2022-09-15
Starbucks Corp. plans to increase its China store count by 50% over the next three years, a vote of confidence in its largest market outside the U.S. despite COVID-19 lockdowns and weaker consumer spending that has damaged its sales.
Starbucks SBUX, +5.53% set a China store target of 9,000 by 2025 at an investor meeting during which executives outlined a wide-ranging revamp. The company previously said it would operate 6,000 stores in China by the end of this year.
The company also said it expects sales to nearly double in China over the next three years, adding that it plans to experience outsize growth in same-store sales starting in fiscal 2023 following this year’s slump.
The company’s optimism about the China market comes despite a brutal year for consumer-facing companies. Last month, the Seattle-based chain said its same-store sales in China fell 44% during the quarter ended July 3 compared with a year earlier, compared with a 3% rise in same-store sales world-wide. The drop marked an acceleration from the 23% slide in same-store China sales during the company’s previous quarter.
On Tuesday, Starbucks executives expressed optimism that the Covid-driven downturn would be temporary, adding that they expect a jump in sales next year as sales rebound from depressed 2022 levels.
