This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Starbucks a China Star

Starbucks estimates that 41% of its Chinese customers are between the ages of 19 and 25. Seventy-five percent are under age 35, Wang says.

By comparison, the average age of a Starbucks customer in the U.S. is now 42.

"There's a huge demographic advantage" in China, says Wang.

In giant first-tier cities such as Shanghai, Beijing and Guangzhou, Starbucks plans to expand into more neighborhoods in addition to commercial shopping and office areas. The coffee chain also has started opening stores in a handful of the less affluent, so-called second-tier cities such as Dalian and Qingdao.

For now, with sales of less than 10% of Starbucks' 2005 revenue of $6.4 billion, China doesn't yet rank among the company's top three international markets (currently Japan, Canada and the U.K.).

Starbucks' "China story is exciting, but will likely not be a significant contributor to the company's 20%-plus total revenue growth over the next few years," writes UBS analyst David Palmer in a recent note. Still, China could "become a meaningful growth driver in the next decade as unit deployment there could approach 500 or more units per year, and as unit growth in the U.S. slows," he adds.

It's also not clear whether the mainland stores are making a profit. "I suspect people walk around thinking they're making very good money here because they see lots of stores, but they never tell you how much money they're making," says Paul French, an analyst for the retail and consumer market research firm Access Asia.
2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SBUX $59.46 1.16%
AAPL $109.50 -1.16%
FB $92.47 0.08%
GOOG $639.16 -0.50%
TSLA $226.72 -2.26%


Chart of I:DJI
DOW 17,050.75 +138.46 0.82%
S&P 500 1,995.83 +15.91 0.80%
NASDAQ 4,810.7880 +19.6360 0.41%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs