Starbucks confirmed on November 21, 2024, that it is exploring strategic partnerships for its Chinese operations. This announcement followed media reports suggesting the company was considering selling a stake in its China business to a local partner.
The company's China business has faced significant headwinds, with comparable store sales declining by 14% in Q4 fiscal year 2024. This performance reflects intense competition from local rivals like Luckin Coffee and Cotti Coffee, which often undercut Starbucks' prices, and a soft macroeconomic environment impacting consumer spending.
While Starbucks reiterated its commitment to growth in China, the exploration of strategic partnerships indicates a willingness to adapt its operating model to the unique market challenges. Such a partnership could provide local expertise, capital, and a more agile response to competitive pressures, aiming to revive sales and market share.
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