As Starbucks faces stiff competition for its brew in China from fast-growing, low-cost rivals who have chipped into its market share, the coffee chain is increasingly being dragged into a price war it says it wants to avoid.
The stakes are high for Starbucks, which has come under growing pressure from investors recently due to weaker sales in its two biggest markets — the United States and China.
While the Seattle-based company has got its work cut out in the world's second-biggest economy, where its rival Luckin Coffee beat it to the top spot on annual sales for the first time in 2023, management is convinced it does not need to get into a race to the bottom on prices.