Starbucks Cuts Beverage Prices In China To Attract Customers

Starbucks Corp. (SBUX) has said it would reduce beverage prices in China to regain market share amid rising competition from fast-growing local rivals.

Through its Weixin social media account, Starbucks China said it would start offering more "accessible" prices on dozens of its drinks, including non-coffee drinks and the Frappuccino.

Reuters, which first reported the news, says the prices of some of its iced drinks will be reduced by 5 yuan ($0.70).

Starbucks has faced a challenge in China from emerging chains like Luckin Coffee (LKNCY) and Cotti Coffee.

The price action comes as Starbucks is reportedly exploring options for its China business.

The chain, which is struggling to reignite growth globally, has contacted private equity and technology firms for options, including an investment and buyout of the China business.

Starbucks has not commented on the reported evaluation of the regional business. On a call with analysts in April, CEO Brian Niccol said he saw "great potential" in the country and was "committed to China for the long term."

Starbucks' results for the most recent quarter fell short of Wall Street expectations, fueling doubts about its turnaround strategy.

Top analysts such as Goldman Sachs and TD Cowen have recently lowered their ratings on the company's stock.

On Stocktwits, the retail sentiment improved to 'neutral' from 'bearish' a day ago.

Starbucks stock is down 1.8% year-to-date.

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