Starbucks to take control of over 1300 Chinese stores

While Teavana products are now for sale in every Starbucks cafe, including fruit-infused iced teas, the company announced this week that it will be closing the remaining Teavana retail stores over the coming year.

Teavana, a Starbucks-owned tea store, will shutter its doors by the end of the year as part of a national closure.

However, Starbucks reported disappointing revenue and comparable sales growth on Thursday in its third quarter earnings report with the Teavana chain partially to blame.

Company officials said that lagging sales and declining mall traffic led to the decision to close the chain, which was acquired by Starbucks back in 2012.

Competition has intensified in the US restaurant industry, making it challenging for chains to get customers to visit their stores more often. With fewer shoppers hitting mall anchor stores like Macy's and JC Penney, fewer shoppers stop by Teavana for a tea break.

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Johnson dismissed the idea that such promotions affect Starbucks, saying that the "value players" are competing in a different segment. Starbucks said those people will receive opportunities to apply for positions at Starbucks stores.

In some respects, Mr. Schultz was correct in his prediction, with tea becoming a large, fast-growing category and a key addressable market and core focus for Starbucks. In the US, sales rose 5 percent at established locations.

Starbucks said earlier on Thursday that it plans to make another major investment in China. The company is committed to operating 5,000 Starbucks stores in Mainland China by 2021, cementing Starbucks' future as a mainly coffee-based business.

Last year, it generated $8 billion in global revenues.

  • Ronnie Bowen