Starbucks can not keep up with bleeding

The quarterly revenue of the Chinese market plummeted by 40%.

Wen ｜ Zhao Jinjie

Edit ｜ Wang Jing

Source | Boxing Finance (ID: daxiongfan)

Cover Source ｜ Vision China

In China and the United States in the world's two core areas, Starbucks is in the two days of ice and fire.

According to the third fiscal quarter report of the fiscal year of the 2022 fiscal year on July 3rd, the total revenue of the third fiscal quarter was 8.15 billion US dollars, a year -on -year increase of 9%; net profit was 910 million US dollars, a year -on -year decrease of 20.9%.

In the United States in the largest market, Starbucks' revenue was US $ 5.62 billion, an increase of 13%year -on -year. It benefited from the average customer unit price of 8%and the number of passenger flow increased by 1%. The same store sales increased by 9%. As of now, the number of Starbucks paid members has increased by 13%in the United States to 27.4 million.

Hostel, a temporary CEO of Starbucks, said that despite inflation, American consumers did not reduce or reduce their expenditure on coffee. In response to other catering companies including McDonald's, they have issued early warnings, thinking that higher natural gas and grocery bills are reducing consumers' visit to the store. Ability to go against the trend.

But in China in the second largest market, Starbucks is still trapped in the tragic decline in sales. In the third fiscal season, Starbucks China revenue was 540 million US dollars, a year -on -year decline of 40%. Affected by the passenger flow decreased by 43%and the average unit price decreased by 1%, the sales of Starbucks China's same stores fell by 44%.

Due to the direct impact of the decline in the performance of the Chinese market, Starbucks' revenue of international departments except North America has decreased by 6% year -on -year, and sales of the same store fell by 18%. Schultz explained that "this is mainly due to China and Covid -19 related restrictions, and the impact of foreign currency conversion from China. "

Part of the loss of the Chinese market revenue, according to Schultz, it is offset by the growth of Starbucks' franchise store revenue, including higher product sales, franchise fees and income, and the Korean market has shifted from a joint venture to a fully franchise to a complete franchise. Growth brought about after operation, etc.

In the third fiscal quarter, Starbucks opened 318 new stores worldwide, making the total number of stores reaching 34,948, of which 51%are the company's self -operated store, 49%are franchise stores, while stores from the United States and China account for 61 %. As of now, Starbucks has 1,5650 stores in the United States and 5,761 stores in China.

Benefiting from the financial reporting data higher than Wall Street's expectations, the stock price of Starbucks rose by more than 1%after the market. But since this year, Starbucks's stock price has fallen more than 30%.

At the financial report, Schultz once again reiterated its emphasis on the Chinese market and believed that "Starbucks' business in China will eventually surpass the United States." In order to achieve this vision, Schultz also needs to lead Starbucks to continue to invest in blood transfusion in the Chinese market.

Since its fiscal year in 2022, the sales of Starbucks China's market have continued to weaken: In the first fiscal quarter, the sales of the same store in the first quarter of the Chinese market fell by 14%, and the average unit price fell by 9%; in the second quarter, the Chinese market revenue appeared 14%again year -on -year year -on -year year -on -year Fall, sales of the same store fell by 20%, and the average unit price dropped by 4%.

At the Second Fortune Season Financial Report and telephone meeting, the executives of Starbucks China explained that the main factor for the decline in revenue was that since the third quarter of last year, about one -third of the Starbucks Chinese market is still temporarily closed or only provides special stars to provide special stars. Getting Hei Crown Express business. Compared with the same period last year, Starbucks has a growth rate of 91%.

At the third financial season financial report, Schultz said that as most Starbucks stores in Shanghai have resumed indoor dining services in June, Starbucks is expected to be effectively improved in the next fiscal season of Starbucks.

In order to fight against new tea drinks and endless cross -border coffee competitors, Starbucks is trying to improve the successful new category of the US market and introduce it to the Chinese market.

In the financial report, Schultz said that the newly launched frozen concentrated coffee accounts for three -quarters of US sales in the sales of cold drinks in the third quarter. "Cold drinks are also very popular with generations of customers." Schultz said.

After testing the water in the North American market in 2021, the frozen concentrated coffee series was pushed to the Chinese market in June this year, and it was improved to the ice concentration series. According to officials, the sales of this series have surpassed the Bing American style and became the first ice coffee category in Starbucks in the Chinese market.

In addition to the new, Starbucks China is still stepping up the expansion of the store in response to the fierce competition in the Chinese market.

According to one -view business statistics, in the first half of 2022, 17 domestic chain coffee brands opened a total of about 3075 new stores, and the store stock reached nearly 19,000, with an average of over 450 newly opened monthly.

Starbucks, once the first domestic coffee track, was surpassed by Ruixing at the end of 2021 (as of 2021, the number of Starbucks Chinese stores was 5,557, Ruixing 6024), it is still facing local coffee such as Manner and Seesaw The brand, as well as new tea brands such as Naixue's tea, happy tea, Honey Xuebing City, and even the market share of cross -border rivals such as Chinese Posts, Li Ning, and Dog Buns.

Faced with the Chinese market that was gradually eaten, Starbucks, which could not sit, began to accelerate the rhythm of store opening. From 600 in 2019 to 5,557 in 2021, it plans to reach 6,000 in 2022. Picture source: Visual China

However, from the actual situation in 2022, the goal of 6,000 stores is huge. Based on the current 5761 calculations, Starbucks will need to open 239 newly opened in the next five months, with an average of nearly 48 newly opened each month. In the second fiscal season, Starbucks only added 97 stores in China, and 107 new fiscal quarters were added. It was calculated that less than 40 stores opened each month.

If you want to realize the bold vision of Chinese business in Schultz's business more than the US business, Starbucks is bound to increase blood transfusion in the Chinese market in order to support the latter to quickly open stores.

Where does money come from? Schultz's sacrifice method is nothing more than "cost reduction and efficiency."

According to the Times, in the face of the unknown and increasingly fierce British market brought about by the epidemic, Starbucks is planning to sell all its business in the UK and is currently looking for cooperation with external consulting companies. Starbucks responded to this that in the future, it will continue to "weigh the strategic options" for its international direct business.

Starbucks, which entered the United Kingdom a year as early as the Chinese market, currently has about 1,000 stores in the territory, of which about 30%are direct -operated stores. The BBC analysis believes that the changes in consumer habits brought about by the epidemic have caused most companies to adjust their response, which leads to rising costs.

In addition to selling unknown international businesses, Schultz is still trying to tap the most profitable American local potential, such as improving store customer traffic and enhancing employee efficiency.

At the DEALBOOK DC forum held in the New York Times in June, Schultz proposed to cancel the free open toilet policy in the United States. Employees bring hidden safety hazards.

However, according to the "CBS News" report, from a business level, this move may be understood as Schultz is trying to boost passenger traffic. A study pointed out that after Starbucks opens the bathroom, the store's traffic has decreased by 6.8%compared with competitors, and the time to stay in Starbucks is also 4.2%lower than competitors.

This is not the first time Schultz has been sold for regional business and reshaping corporate culture. As early as 2007 Starbucks caused a crisis due to rapid expansion, Schultz, who was re -out of the mountain, made the concept of "third space" through the radical "slimming plan" and the relationship between customers and communities. Roots, successfully led Starbucks out of the predicament.

Right now, Schultz began to "re -applied his old skills." In July, in a letter from Starbucks partner, Schultz shared a series of new principles and new partnerships in order to reshape the new chapter of Starbucks.

It is mentioned that Starbucks now needs to re -stimulate and cultivate employee spirit. It's not just Schultz who is worried about employees. As a big, Google has also begun to set off a rationalized proposal solicitation plan called the "simple cycle". Google CEO Picchai explicitly pointed out that Google's current production efficiency does not match the total number of employees. He hopes that employees will help the company create a new corporate culture, pay more attention to the company's mission vision, and put more energy on products and customers.

For Starbucks, a major means of stimulating employee efficiency are the adjustment of the salary system. On the first day of the position of Starbucks CEO in April this year, Schultz announced the suspension of Starbucks's stock repurchase plan. One of the goals was to invest more profits to the staff to enhance the attractiveness of talents.

Not only is it against the United States, in order to retain talents, Starbucks China has also begun to increase employee salary and benefits. In November last year, Starbucks China's official website announced that since October 2021, all Starbucks China Full -time store retail partners (employees) will enjoy "14 salary" for the first time.

At the financial report, Schultz announced that it would invest $ 1 billion in fiscal year in 2022 to use additional investment in partners and stores, such as salary increases, modern training and collaboration, store innovation and other behaviors.

In addition to short -term efficiency measures, Schultz also planned some long -term plans for Starbucks.

Such as entering the new energy car track. In March of this year, Starbucks officially entered the electric vehicle replenishment track and cooperated with Volvo to laid a DC charging network. At the same time, Starbucks also revealed that it will continue to expand its investment in new energy afterwards, and promises that by 2030, all solar charging stations will use solar energy as a source of electrical energy.

Face -faced faction mentioned in "Schultz Three Salvation Starbucks" that for Starbucks, it will undoubtedly use the charging time to leverage the potential customer group and make it a new consumer household in the store, thereby increasing the unit price of the store. Through the linkage of the current hot new energy vehicle track, it will increase its attractiveness to the young consumer groups of generations.

This is not over yet. In May, Starbucks caught up the popular air outlet of the wave of NFT, saying that the blockchain technology will be used to build the web3 number "third space", and the first NFT digital collection will be launched by the end of the year. The collection will be based on the collection. Based on the narrative of coffee art and story.

According to the official plan, Starbucks's digital community Web3 will be an easy -to -interact and widely visited front -end combination, and will join forces with other world -class brands to create a series of brand NFT collection. Schultz explained that Starbucks believes that NFT has extensive potential and it will become the source of income for Starbucks value -added business.

The space culture derived from the "Third Space" supports Starbucks's powerful brand premium. This cultural identity in turn will nurture the surroundings of Starbucks and can capture high profits in similar market products. However, in the virtual digital space, whether the Starbucks system can still get the consumption recognition of the younger generation, it will be the direct challenge of Schultz to promote NFT.

From the rescue of Starbucks in 1987 to financial crisis, to the successful transformation of Starbucks in 2008, the outside world was looking forward to the third time Schultz, who was out of the mountain in 2022 to continue to stage a miracle.

According to the Starbucks Board of Directors, Schultz, who is a temporary CEO, will select the next official CEO candidate before this fall, and he can continue to serve as the temporary CEO until the first quarter of fiscal year 2023.

However, from the perspective of the capital market feedback, since the four months of CEO, Starbucks under the leadership of Schultz has never been able to get out of the downturn, and it is still swinging. Starbucks wants to return to the market value of 100 billion US dollars, and may only wait for the performance of the Chinese market.

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