Starbucks is hoping the cost synergies in its deal with Nestle will enable it to mitigate the pressures of fighting waves of small boutique coffee stores in the U.S. and China.
Feeling the pressure in its home market, Starbucks Corp stated it is looking to more than triple its revenues and nearly double its store count in China over the next five years and aims to have around 6,000 stores, from its current 3,300 stores in 141 cities, in China by 2022.
Similar to the competition it is facing in its home market, Starbucks, which dominates China’s coffee scene, is seeing competition from a “third wave” of boutique coffee sellers.
In 2017, when it opened its first overseas “Reserve Roastery”, a flagship store housing gourmet coffees as well as a bakery, in Shanghai, its executive chairman Howard Schultz stated, the number of Starbucks stores in China is likely to hit 10,000 within a decade.
In 2017-2018, Starbucks’s revenues touched $3.24 billion in the China/Asia Pacific region while its operating income was $764.8 million.