Recently, it was reported that Starbucks Zhenxuan Xintiandi Store in Shanghai, which has been operating in Shanghai for 24 years, will end its lease. On December 16, Starbucks China responded to the news by saying that due to the adjustment of the business type of Xintiandi Business District, Starbucks Zhenxuan Xintiandi Store will end the lease on December 31.
The relevant person in charge of Starbucks China stated that the adjustment and transformation of business districts and the upgrading of stores are the norm in the retail industry. At the same time, more than ten Starbucks stores in Xintiandi Business District will continue to provide customers with high-quality coffee.
It is reported that China is Starbucks' largest international market in the world. Rooted in China for 25 years, Starbucks has become a leading brand in the premium coffee industry in China. Currently, Starbucks has over 7600 stores in China, covering 1000 county-level markets.
In terms of performance, Starbucks had a tough time this year.. Data for the fourth quarter of fiscal year 2024 shows that Starbucks' global revenue reached $9.07 billion, a year-on-year decrease of 3.2%; The net profit attributable to the listed company was $909 million, a year-on-year decrease of 25.5%. Not only did the core business data fall short of expectations, but the brand's global same store sales also decreased by 7% year-on-year, far exceeding previous expectations. At the same time, Starbucks no longer releases its outlook for next year's performance growth.
It is worth noting that in the fourth quarter, Starbucks China achieved revenue of $784 million, a year-on-year decrease of 7% and a month on month increase of 6%; Comparable store sales decreased by 14%, average order value decreased by 8%, and order quantity decreased by 6%.
Looking back at the 2024 fiscal year, Starbucks China only saw a 10% increase in same store sales and an 18% increase in revenue in the first quarter, driven by the expansion of its lower tier markets and the recovery of domestic offline catering consumption. However, in the second to fourth fiscal quarters, key indicators such as brand revenue, same store sales, and order size all decreased year-on-year compared to the 2023 fiscal year. In most cases, the data decline rate in China is faster than Starbucks' overall global decline.
Or due to its difficulties in the largest international market, Starbucks China recently established the position of Chief Growth Officer (CGO) for the first time and appointed Yang Zhen, aiming to attract young coffee drinkers to return. It is understood that Yang Zhen is the former head of the user development department at Jiyue Automobile.
In addition, there are market reports that Starbucks is studying and discussing the development of its business in China, including the possibility of selling shares in the business. At the same time, the company has informally evaluated the interests of multiple potential investors, including local private equity firms in China.
In response, a Starbucks spokesperson stated that the company is committed to the development of its business in China and the maintenance of its partnerships. They are striving to find the best development path, including exploring strategic partnerships.