Coffee chain Starbucks China and free video call sexLuckin both experienced a double-digit decline in same-store sales in the June quarter of 14% and 20.9% respectively, sending a signal that consumption headwinds and intensified competition are still dampening the brands’ earnings. Laxman Narasimhan, CEO of US-headquartered Starbucks said China is “one of our most notable international challenges,” citing “unprecedented store expansion” and “a mass segment price war” as reasons for the underwhelming performance in the past year. China contributed $733.8 million in revenue to Starbucks, down 11% from a year prior. Luckin Coffee, which has adjusted its flagship “9.9 yuan a coffee” campaign in scope since February, has seen operating margins turn up 12.5% from a negative figure last quarter. The Chinese coffee chain reported 35.5% growth to RMB 8.4 billion ($1.16 billion) in second-quarter earnings, a growth rate half the figure a year ago. [Starbucks; Luckin Coffee]
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