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Analyst: ‘make me CEO, I can turn around Starbucks in China’

by July 5, 2025
by July 5, 2025

Shaun Rein, a senior China Market Research analyst, didn’t mince words about Starbucks Corp’s (NASDAQ: SBUX) faltering performance in China as he spoke with CNBC on Friday.

According to him, Starbucks is struggling in China even though experiential consumer categories like sports apparel are thriving because it’s been making “major strategic mistakes” in the region for years.

“Starbucks used to be luxury in a cup – now it’s just expensive coffee in a bad environment,” the analyst noted, adding ‘I’m very bearish” on Starbucks stock that’s currently down some 20% versus its year-to-date high.

Starbucks can’t compete on price with local coffee chains

Shaun Rein said he had a “really bad experience” at a Starbucks outlet recently, where 40% of the premium menu items weren’t even available.

In his interview with CNBC, the analyst said SBUX has lost its aspirational appeal in China, a market where it once symbolized sophistication and upward mobility.

“They’ve remained expensive, but their outlets are terrible,” he added. Rein also blasted Starbucks for attempting to compete with local rivals like Luckin Coffee on price, arguing “you can’t compete with Chinese companies on price.”

Instead, he added, SBUX needs to return to its roots: premium coffee, a refined in-store experience, and a sense of exclusivity to regain that “luxury in a cup” feeling.

SBUX should team up with local firms in China

Shaun Rein is convinced that a team-up with a local firm like Prima Vera, Hillhouse, or Fountain Vest that better understands the domestic market dynamics could help Starbucks regain its glory in the world’s second-largest economy.

Then, with a mix of candor and ambition, Rein offered an even bolder fix: forget committees and consultants – just give him the reins.

If a PE firm buys them, make me CEO because I think I can turn around Starbucks in China.

Rein has spent nearly three decades in China advising Fortune 500 firms and has authored several bestsellers on Chinese consumer behavior.

His firm has worked with global brands on navigating China’s complex retail landscape, and he’s long advocated for deeper localization and cultural fluency.

Is it worth buying Starbucks stock at current levels

Indeed, Starbucks’ same-store sales in China have declined amid a broader price war, while Luckin has surged ahead with over 20,000 outlets and a tech-savvy, app-first model.

Starbucks, by contrast, has been slow to localize its offerings and store experience, despite launching a ¥1.5 billion innovation center and rolling out over 78 new products in 2024.

Wall Street currently has a consensus “overweight” rating on Starbucks stock, but the mean target of about $93 is in line with the price at which it’s trading already.

That said, a 2.58% dividend yield makes SBUX shares at least a bit more attractive to own at current levels.

The post Analyst: ‘make me CEO, I can turn around Starbucks in China’ appeared first on Invezz

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