Starbucks (SBUX) To Take China By Storm
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Price: $103.98 -0.45%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.4%
Revenue Growth %: -3.1%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.4%
Revenue Growth %: -3.1%
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Starbucks Corp. (NYSE: SBUX) said Tuesday that it plans to open thousands of new stores in China in the future as the world's most populous country will move past Japan as the company's second-biggest market, according to CEO Howard Schultz who told the Wall Street Journal of the company's plans.
The U.S. coffee giant added that it plans to enter the potentially lucrative markets of Vietnam and India where it does not currently have a presence.
"Asia clearly represents the most significant growth opportunity on a go-forward basis," said Mr. Schultz, in an interview with The Wall Street Journal. "India and Vietnam are two markets we'd like to get to at some point. We are still at the embryonic stages of what Asia will be for the company."
Currently, Starbucks has opened 376 stores in China since entering the market with its first store in 1999 located in Beijing. Today, there are 878 locations for the company in Japan.
"The foundation we have built over the past 10 years will serve us well. But it's a complicated market that requires significant discipline and thoughtfulness," Schultz added.
The company is turning to the international market after closing hundreds of stores in the U.S. during the economic recession. Starbucks reported its first same store sales growth for a quarter in January since the end of 2008.
In the U.S. and around the globe, competitors are popping up to sell coffee at a third of the price of a cup that Starbucks does. As the recovery takes hold the company is counting on conservative consumers to reopen wallets and return.
"Cracking the code in China for any company is not an easy task—there will be a number of winners and lots of losers of people who go there and rush to judgment and don't succeed," Schultz said. "The thing I am most interested in when I go to China is whether or not local Chinese are buying Starbucks coffee and sitting in our stores."
Shares of Starbucks are down 6 cents to $24.43 in premarket trade on Tuesday.
The U.S. coffee giant added that it plans to enter the potentially lucrative markets of Vietnam and India where it does not currently have a presence.
"Asia clearly represents the most significant growth opportunity on a go-forward basis," said Mr. Schultz, in an interview with The Wall Street Journal. "India and Vietnam are two markets we'd like to get to at some point. We are still at the embryonic stages of what Asia will be for the company."
Currently, Starbucks has opened 376 stores in China since entering the market with its first store in 1999 located in Beijing. Today, there are 878 locations for the company in Japan.
"The foundation we have built over the past 10 years will serve us well. But it's a complicated market that requires significant discipline and thoughtfulness," Schultz added.
The company is turning to the international market after closing hundreds of stores in the U.S. during the economic recession. Starbucks reported its first same store sales growth for a quarter in January since the end of 2008.
In the U.S. and around the globe, competitors are popping up to sell coffee at a third of the price of a cup that Starbucks does. As the recovery takes hold the company is counting on conservative consumers to reopen wallets and return.
"Cracking the code in China for any company is not an easy task—there will be a number of winners and lots of losers of people who go there and rush to judgment and don't succeed," Schultz said. "The thing I am most interested in when I go to China is whether or not local Chinese are buying Starbucks coffee and sitting in our stores."
Shares of Starbucks are down 6 cents to $24.43 in premarket trade on Tuesday.
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