Richard Brubaker

Chinese Discontent Only Minor Setback in Starbucks Growth Potential

Siwei,

As someone who frequents Starbucks on a daily basis in Shanghai, I would say that the trend has not changed. there are now 6 Starbucks on Nanjing Road, and business is very good right now.. and primarily rooted in local Chinese consumers (I would wonder what number are returning vs. first and only timers).

one thing I would point out with regard to the Forbidden City is that they have enjoyed 7 years business in that store, and that in and of itself proves that the decision to move in there was the right one. Sure, there have been some flare-ups, and it may be time to go now, however 7 years in a single location is very respectable in the retail world... and even more so when you have hundreds of thousands of people walking by on a daily basis.

No doubt, the Asia market as a whole is one that Starbucks views at strategically very important, and I will be interested to see how the recent flare-up plays out. It may fizzle, it may lead to the shop being closed, but I do not think that it will have a long term impact unless something drastic happens.