In the matter of quickly opening the store, Luckin won Starbucks. As of December 16, the number of Luckin coffee stores in China reached 4,910, 600 more than Starbucks had in the same period, according to Thinknum, a Us data firm. The coffee maker said it “does not comment” on the matter. At the end of the third quarter of this year, the total number of Luckin Coffee stores was 3,680, an increase of 2,491 from 1,189 in the same period last year.
In just one year, the number of stores has soared by 209.5 per cent, with an average of nearly seven new stores opening a day. Over the same period, Starbucks’ number of stores in China rose 17 per cent to 4,125, with an average of 1.7 new stores added a day.
In early November, the two companies had a flat number of stores in China, both 4,200.
Now, Thinknum’s disclosure of the number of 4,910 means that Luckin Coffee has met its previous store opening target ahead of schedule. In early 2019, the company proposed plans to increase the number of stores to 4,500 by the end of the year, while overtaking Starbucks as China’s largest coffee chain in terms of store numbers and cups.
Next, Luckin Coffee aims to open 10,000 stores by the end of 2021.
Despite surpassing Starbucks in the number of stores, the size of the stores is not the same as that of Starbucks. Most of the coffee stores are fast-access stores, and it doesn’t welcome “one cup of coffee for a day” consumers.
Fast shop opening for Luckin, not only to expand the market share, but also its revenue growth is the main source. From its third-quarter results, Luckin revenue rose 558 percent year-on-year to RMB1.49 billion, meeting analysts’ expectations, with average sales per store of RMB44.96 million, up 79.5 percent from RMB25.05 million a year earlier.
However, the way in which Luckin stays depends mainly on promotional discounts and high-profile marketing. Among consumers, many people hold the attitude of “no 1.8 percent discount coupon sidon. In Luckin’s earnings report, these money-burning ways of staying are not included in the “store level” operating profit margin accounting, the cost of the financial report is only raw materials, rent and other use and depreciation costs. As a result, its revenue and store sales were bright, but its net loss widened to 532 million yuan from 485 million yuan a year earlier.
Starbucks’ like-for-like store sales grew 5% in the third quarter.
Earlier, industry analysts said that it is expected to break even when the number of Luckin Coffee stores reached 4,500.