Covid restrictions slow Starbucks sales in China

In the three months to July 3, sales at Starbucks China stores that have been open for at least 13 months fell 44%.

“China has faced the most severe COVID disruptions since the pandemic began,” Starbucks China chairman Belinda Wong said on an analyst conference call on Tuesday, discussing the outcome. It was implemented more quickly and eased more slowly under the COVID-19 zero policy,” she said, adding that Shanghai, Starbucks’ biggest market, was completely locked down for about two-thirds of the quarter. He added that it was taken down.

Starbucks international sales fell 18% in the fourth quarter, dragged down by poor performance in China. Even offsetting the drop in sales there, overseas growth should have been double-digit, the company said on Tuesday.

Chinese Zero Covid Policy It makes it difficult for individuals and businesses to return to business as usual. This is a problem for Starbucks, which considers China one of its most important markets. Starbucks has about 5,760 stores in China and sees the region as an opportunity for brand growth.
Covid-19 restrictions have held back Starbucks' sales in China.

Even after a difficult quarter, Starbucks interim CEO Howard Schultz said in a conference call on Tuesday that “our market position and future ambitions in China have never been greater. ‘ said.

Ms Wong said the situation was improving as Covid restrictions eased, saying “traffic and sales immediately improved after Shanghai reopened in early June.” As we navigate through the short-term turmoil, we maintain a relentless focus on the long-term.” The company plans to open 6,000 locations in China by the end of the year.

In other international markets, Starbucks is rethinking its existence.Earlier this year, Starbucks announced that it leave Russia forever Because of the civil war in Ukraine.
and British newspapers The Times reported in July Starbucks was considering whether it could or should sell its business in the UK. Starbucks said at the time that it was not involved in a “formal sales process” and reiterated its desire to remain in the region.
In the United States, where the company is fighting, Build an organizing effort, sales are growing. Sales for U.S. stores that have been open for at least 13 months, he increased 9% in the quarter.
Investors are happy with the company’s overall performance despite the decline in China. Starbucks (SBUX) The stock jumped nearly 2% after hours on Tuesday.

Source: www.cnn.com

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