Starbucks has had a tough year. The share price is down 17% year to date, Howard Schultz will be returning as CEO for the third time, and the company has poorly handled a unionisation push by employees (which the employees have overcome, since the first Starbucks store unionised in December 2021, they are now up to 250 stores and counting).
While the coffee chain has been reporting record sales in America, it is struggling in its biggest growth market – China. In its most recent report it saw a 19% fall in revenue from China year-on-year. Which is a shame for a company that has been opening stores in China at an incredible rate – stores in China have grown at a compounded annual rate of 25% between 2011 and 2022.
There is an obvious reason for this – China’s ongoing COVID zero policy. But this article takes a look at the story beyond this recent fall. As Starbucks opens its 6,000th store in China, now easily its second biggest market after North America, will the coffee chain be able to succeed where so many other American companies have failed? Will Starbucks be able to make it in China?
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