World’s largest coffee chain anticipates financial impact from coronavirus will ‘intensify’ before moderating in July-September 2020
Starbucks says it is entering a 'monitor and adapt' phase in the US as it prepares to reopen stores closed by coronavirus
Starbucks has reported global revenues of $6bn for the 13 weeks to 29 March 2020, a 5% fall on the same period last year, mainly due to store closures because of coronavirus, the company has said.
In the coffee giant’s flagship US market,
comparable store sales fell 3%, partially offset by 5% increase in average tickets. In China, where Starbucks has more than 4,300 stores, comparable sales were down 50%.
The US and China
are two crucial markets for the Seattle-based firm, containing 61% of its 32,000+
global store portfolio. More than 75% of company-operated stores in Canada, Japan, and the UK are currently closed, with over 50% of licensed stores globally non-operational.
Despite tentative signs of recovery in China and plans to reopen many stores in the US, Starbucks said it expects the negative financial impact of coronavirus to be ‘significantly greater’ in the third quarter of its fiscal year (April-June). A ‘moderate’ level of coronavirus disruption is expected July-September, the company added, given the late quarter onset of coronavirus in the US, where more than 14,000 of its stores are located.
Starbucks’ experience of dealing with coronavirus in China gives it valuable operational experience as it begins reopening stores in the US, where around half of its company-owned cafés are currently closed.
“We are leveraging our experience in China to inform our actions in other markets, including the United States, where we are now entering the ‘monitor and adapt’ phase to reopen many more stores with best-in-class safety protocols,” Starbucks CEO Kevin Johnson said.