Starbucks slumps at festive period while it's Shanghai roastery shines
Starbucks said that it had disappointing sales growth this quarter after its holiday drinks performed poorly in the US market.
Same-store sales came up short of market expectations because although customers added food to their orders, the number of cafe visitors did not increase.
Chief Executive Kevin Johnson said: “Holiday (limited-time offers) and merchandise did not resonate with our customers as planned."
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Despite this, the coffee giant said that it saw robust growth in China with same-store sales rising 6%.
"China grew revenues 30 percent in Q1, with the strategic acquisition of East China positioning us to accelerate our growth in the key China market," said CEO Johnson.
China has been a critical market for the world’s largest coffee chain. Eight weeks ago Starbuck's opened its largest ever site, the Shanghai Reserve Roastery, and it has shown strong financial results.
"Our U.S. Starbucks stories, on average, do about $32,000 a week," said Howard Schultz, Starbucks' chairman.
"The Roastery in Shanghai, after eight weeks of operations is doing, on average, twice that not each week, but each day."
At the moment, Starbucks has over 28,000 stores in 76 markets, with about half of these located in the United States. In contrast, the US chain has more than 3,100 stores in China but hopes to grow its presence in the region.
"In my long, long history of Starbucks, I have never, ever seen anything remotely like what happened when we opened the Shanghai Roastery," Schultz said. "We shattered every sales record in the history of the company. China is going to be larger than Starbucks in the U.S.,