Starbucks China Market performance in the fourth quarter of 2021 what is the reason for the decline of Starbucks China business?

Starbucks, a global coffee chain, released its results for the fourth quarter ended October 3, US Eastern time on Oct. 28, the Wall Street Journal reported.

Starbucks' fourth-quarter net revenue and consolidated sales fell short of market expectations, according to the latest earnings data. Starbucks Q4 reported net revenue of $8.1 billion, compared with market expectations of $8.21 billion, and Q4 reported profit of $1.76 billion, up from $392 million in the same period last year.

In terms of store sales, Starbucks was strong in the United States, but there was a decline in sales in China. Global same-store sales at Starbucks rose 17 per cent year-on-year, down from the 18.3 per cent previously estimated by StreetAccount, according to Q4 results. Of this total, sales in North America were 5.763 billion, and same-store sales in the US jumped 22 per cent, up 11 per cent from pre-epidemic levels, but same-store sales in China were down 7 per cent from a year earlier. The main reason for the decline in same-store sales in China was hit by the epidemic in mid-August, which is understood to have affected 80 per cent of stores in the country.

In terms of the performance of new stores, Q4 reported that Starbucks added 538 stores, an increase of 4% from a year earlier. According to Starbucks' quarterly report, Starbucks opened a net 225 new stores in China in the fourth quarter.

Starbucks' full-year revenue in fiscal 2021 was $29.06 billion and net profit was $4.2 billion. For fiscal 2022, Starbucks said it expects global same-store sales of $32.5 billion to $33 billion and plans to add about 2000 new stores around the world. most of these will be opened outside the US market.

So far, Starbucks has 33833 stores worldwide, of which 51 per cent are direct stores and 49 per cent are franchised stores.

By the end of the fourth quarter of fiscal 2021, the United States and China accounted for 62% of Starbucks' global stores, including 15450 in the United States and 5360 in China.

In addition, with regard to the current serious global labor problem, Starbucks executives said that manpower expenditure is a necessary condition to attract and retain employees, and Starbucks is currently improving its training direction and other shift changes. including yesterday's report of "labor shortage, Starbucks pay rise again!" Starbucks said that from the end of January next year, Starbucks partners who have worked for two years or more in the United States can get a salary increase of up to 5%, and those who have worked for more than five years can get a salary increase of up to 10%. The hourly wage of Starbucks partners across the United States will be raised to $15-$23 per hour, and the average wage will rise to nearly $17 per hour.

In addition, on Oct. 21, according to an internal document quoted by foreign media Business Insider, Amazon and Starbucks are negotiating to open a coffee shop together.

The joint cafe will be designed for urbanites between the ages of 25 and 45 or those who are pressed for time. One of the features is Amazon's Just Walk Out technology, which allows consumers to check out without queuing, thus realizing a cashier-free purchase model.

But so far, there has been no news of further progress on the project.

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