“Our immediate focus is on two key priorities in China,” Starbucks chief executive Kevin Johnson told analysts on Tuesday. Caring for the health of staff and customers came first. Helping local health officials and government leaders contain the coronavirus came second.
The priorities come with a heavy price tag. Starbucks has temporarily closed more than half of its stores in mainland China as the outbreak spreads. Company executives called it a “very complex situation” and said some stores shut at the direction of local officials, while others closed “proactively” to limit the risk to workers and customers.
No other market except the United States is bigger for the chain. Starbucks had almost 4,300 stores in China by the end of 2019, and Beijing’s response to the virus has included locking down multiple cities with tens of millions of residents.
Johnson said he had planned to raise Starbucks’ financial forecast for the year on Tuesday. That is off the table for now “due to the dynamic situation unfolding with the coronavirus.” In its earnings release, the company said it was monitoring all China stores and changing their operating hours in response to the outbreak.
Retail beyond coffee
McDonald’s and KFC have been shutting stores as well. McDonald’s was expected to give an update on Wednesday, when it reports quarterly earnings. Tim Cook, chief executive of Apple, said on Tuesday that one of his company’s retail stores had closed.
“Many of the stores that remain open have also reduced operating hours,” Cook said. He listed extra precautions: frequent deep cleaning and temperature checks for employees.
Spread of the virus
Chinese authorities said that as of Wednesday nearly 6,000 people had fallen ill, and more than 130 had died, after cases climbed sharply in recent weeks. Australia, France, Canada and the US have reported cases of their own.
American officials count five confirmed cases, each in someone who had recently been to Wuhan. Speaking at a news conference on Tuesday, top US health officials again said the disease is serious but poses no current threat to ordinary Americans.
Sources
Sources
- Starbucks Closes More Than 2,000 Stores In China Amid … – NPR
- Starbucks closes some stores and removes chairs due to coronavirus
