🎵 Donate any amount today and download 5 different Marketplace ringtones 🎵 Give Now

Starbucks sees grounds for optimism as sales in China rebound

Mitchell Hartman Jan 27, 2021
Heard on:
HTML EMBED:
COPY
Starbucks has the resources to weather the COVID-19 slowdown, one analyst says. Above, a woman wearing a face mask walks past a Starbucks in Beijing on Jan. 30, 2020. Nicolas Asfouri/AFP via Getty Images

Starbucks sees grounds for optimism as sales in China rebound

Mitchell Hartman Jan 27, 2021
Heard on:
Starbucks has the resources to weather the COVID-19 slowdown, one analyst says. Above, a woman wearing a face mask walks past a Starbucks in Beijing on Jan. 30, 2020. Nicolas Asfouri/AFP via Getty Images
HTML EMBED:
COPY

Global coffee-joint giant Starbucks reported its first-quarter earnings Tuesday after the market closed. Same-store sales were down 5% from a year ago in the United States, as COVID-19 continued to hamper business. But in China, sales rebounded to rise 5% year over year.

Serving up food and drinks has been one of the worst businesses to be in through the pandemic. And Mark Cohen at Columbia Business School said in that kind of business, only the strongest survive.

“Starbucks was a very successful business going into this crisis and will likely find a way through it,” he said.

The company has offset the loss of walk-in, sit-down customers by expanding drive-thrus, online ordering and curbside pick-up.

Starbucks global reach is an asset, too, said Tuna Amobi at CFRA Research. 

“China and the Asia-Pacific are actually much further along on the road to recovery compared to the U.S. and Europe, so I think that’s helped Starbucks,” Amobi said.

And while Starbucks has the resources to weather the COVID-19 slowdown, a lot of its coffee shop competitors don’t, said Jim Hertel at Inmar Intelligence. 

“Some of the smaller ones and the less nimble ones just aren’t going to come back when this is over,” he said.

Starbucks said it added 278 stores in the final months of last year.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.