Starbucks continues China investment despite revenue dip

Starbucks, the world's largest coffee chain, said it will continue to invest in new stores and smart technologies to better connect with consumers digitally in China despite a net revenue decline in the second fiscal quarter.

According to its second quarter results, Starbucks' net revenue in China declined 14 percent and comparable store sales decreased 23 percent, driven by a 20 percent decline in comparable transactions and a 4 percent decline in average sales per customer.

Roughly a third of its stores in China remain temporarily closed or are offering delivery or pickup only. Most of its remaining stores are operating under strict safety protocols that interfere with traffic and operations.

But the coffee chain said it will continue to invest to increase its digital connection to customers. Digital orders now represent a record 43 percent of sales. Its launch on the Meituan platform in January has driven incrementality and made Starbucks the coffee category leader on third-party delivery platforms, the company said.

Starbucks added it is on track to achieve its goal of operating 6,000 stores in China by 2022. In its fiscal second quarter, the company added 97 net stores and the United States and China comprised 61 percent of the company's global portfolio. There are 15,544 stores in the US and 5,654 stores in China.