World

Flush with Nestle cash, Starbucks wants to triple China revenue

Flush with Nestle cash, Starbucks wants to triple China revenue

Starbucks is the dominant figure in the coffee scene of China, although it has seen increased competition from much smaller rivals, the same way it has come under pressure from boutique coffee roasters and less expense rivals across the U.S. Now, it's shooting for nearly double the amount of shops in China - the world's second largest economy - to 6,000 from its current 3,300 in the next five years.

Starbucks presented the company's key drivers that will fuel its market growth in China over the next five years at its first-ever China Investor Conference in Shanghai on 16 May.

The Seattle-based company also expects to more than double its operating profit in China by fiscal year ending 2022.

Starbucks is shaping up an aspiring plan to compete in the race with KFC to become the quickest-growing foreign food chain with the unfolding of 600 new stores every year thus tripling the revenue by 2022. "We are committed to long-term investment in China". In China, the current outlets are 3,300, with a comparison to the US which has about 12,000 outlets, including the licensed stores.

According to the Starbucks' latest report, the Asia-Pacific region jumped 54% last quarter compared with the same period a year earlier.




The push in the Chinese market comes as its stores in the USA face fierce competition from up-and-coming regional coffee houses and steep discounting from fast-food rivals.

Mr Johnson said that while same-store sales in the U.S. have been weaker than expected, strong performance in new stores stateside means it's still on track "to deliver USA growth within the targeted range that we've given of high single-digits".

The corporate is flush with money, having sold Nestle (NSRGF) the rights to promote Starbucks-packaged tea and occasional world wide for $7.2 billion earlier this month.

"The power of our brand in China, the strength and momentum in our business, and the world-class Chinese leadership team give me great confidence in our ability to capture the enormous growth opportunities ahead in this dynamic market", said the company's CEO and president, Kevin Johnson. It is bringing a brand new line of pre-made chilly tea and occasional toChina subsequent month.