Starbucks CEO on China Tensions: “We’re Not Immune” but “We’re Playing the Long Game”
Add Dunkin Brands as the latest company challenging Starbucks on serving up a premium cup of joe. Dunkin, which recently dropped “Donuts” from its name, is changing its menu to include new recipes for its espressos, lattes and cappuccinos.
In China, upstart Luckin Coffee is winning over tea-drinking Chinese consumers, by undercutting Starbucks (SBUX) with lower prices.
But none of this worries Starbucks CEO Kevin Johnson. Speaking with Fortune about his bold expansion plans in China, Johnson says, “We’ve always had competitors. So it’s no surprise. There will be new competitors in China and new competitors around the world. But we have to stay focused on the experience we create in our stores.”
Johnson is counting on that Starbucks experience to pay off big in China. He says the coffee chain will open a new Starbucks store every 15 hours over the next four years in China. The hope is that will give a caffeine jolt to anemic sales growth in the U.S., Starbucks’ largest market. With revenues of more than $22 billion, Starbucks is ranked number 132 on the Fortune 500 list of the biggest companies in America.
And despite trade tensions between the U.S and China, Johnson is not making any changes to his growth plans. “We’re not immune to geopolitical situations. But the one thing I do believe is the number of jobs we create in China, the number of customers we serve in China, the investment we make in building our stores is from local Chinese contractors,” he says, “we’re really integrated in China and we’re playing the long game.”
Watch the video above for more from our interview with Johnson.