Executive Summary: Comments from Starbucks FY3Q22 investor call: “In Q3, China faced its most severe COVID disruption since the onset of the pandemic. Mobility restrictions and lockdowns were implemented faster and eased more slowly under China’s zero COVID policy. Shanghai, our largest market with more than 940 stores, was completely locked down for approximately 2/3 of the quarter. In Beijing, 150 stores or roughly 1/3 of our stores in the market were closed for almost 6 weeks with the balance of our Beijing stores operating without indoor dining.”
“We entered Q3 with over 1,300 stores, close to 1/4 of our total portfolio, temporarily closed. We exited the quarter with roughly 2,000 stores across nearly 50 cities operating with mandated reductions in seating capacity or other COVID restrictions. Similar patterns remain today with COVID restrictions being eased in some cities and new restrictions imposed in others. We continue to expect our recovery in China to be nonlinear.”
And then this: “We continued our store expansion in Q3, opening 107 net new stores and entering 3 new cities despite the headwinds and now operate 5,761 stores across 228 cities. And we remain on track to have 6,000 stores in China by the end of this year.”
Did the Chinese government promise Starbucks no more lockdowns going forward if they agree to invest more capital in their country? Are we missing something???