Starbucks is opening a store in China every 15 hours

By Angelica LaVito

Starbucks is opening one store in China every 15 hours, the company’s China CEO Belinda Wong told “Squawk Box.”

China has become Starbucks’ second largest and fastest growing market, and one the company expects to eclipse the U.S. market one day. Starbucks already operates more than 3,000 stores in the country and plans to increase that number to 5,000 by 2021.

The company opened a 30,000-square-foot Reserve Roastery in Shanghai, its flashiest commitment to its growing Chinese business. It’s the second Starbucks’ Roastery to open and is twice the size of its flagship location in Seattle.

“To us, we open 500 plus stores a year, but to us, it’s not about 500. It’s about opening a store 500 different times because you’re in a different neighbourhood and we’ve got to build that relationship with our customer,” Wong said.

Starbucks is now building more net new company-operated stores in China than the U.S., said CEO Kevin Johnson, who replaced CEO Howard Schultz in April when the long-time leader transitioned into the role of executive chairman.

In China, Starbucks’ young baristas and shift supervisors receive a housing allowance subsidy, Wong said. The idea is to give those employees who have likely just finished college financial security.

Comparable-sales growth in China is outpacing the U.S. Last quarter , China posted an eight per cent increase, compared with a three per cent gain in the U.S., excluding impacts from Hurricanes Harvey and Irma.

Starbucks is serving more than 5 million customers in China per week, Johnson said. Most of those visits occur between 1 p.m. and 3 p.m., but he said the stores are starting to see more residents adopt the American habit of drinking coffee in the morning.

Shares of Starbucks have risen 5.8 per cent this year.

Read the original article at CNBC