Starbucks Denies Full China Exit Amid Stake Sale Talks As Market Share Slips To 14%

Starbucks Corp. SBUX denied reports of considering a complete sale of its China operations, though the Seattle-based coffee giant has reportedly initiated preliminary discussions with potential buyers about divesting stakes in its Chinese business.

What Happened: The denial comes after Chinese financial magazine Caixin reported Monday that Starbucks was exploring a full sale, citing unnamed sources. “I can confirm Starbucks is not currently considering a full sale of its China operations,” a company spokesperson told Reuters.

However, Starbucks kicked off a formal sale process in May, with Goldman Sachs advising on the potential transaction, according to the report. The investment bank had solicited responses from interested buyers by last week, requesting details on corporate culture, management approach, sustainability measures, employee treatment, and proposed deal structure.

More than 20 institutions responded, including multiple private equity firms, according to sources. Reuters previously reported that KKR & Co., Fountainvest Partners, and PAG are among buyout firms interested in acquiring stakes.

The strategic review reflects mounting pressure from Chinese competitors. Starbucks’ market share plummeted from 34% in 2019 to 14% in 2024, according to Euromonitor International data, the report noted.

Why It Matters: Local rivals Luckin and Cotti offer beverages at significantly lower price points, forcing Starbucks to compete against coffee priced under 5 yuan ($0.70) per cup through e-commerce subsidies.

TD Cowen analyst Andrew Charles maintains a Hold rating with a $90 price target, citing declining value perception and rising competition. Charles noted the company appears to be “recalibrating to a new earnings baseline” following post-COVID normalization.

Starbucks recently announced its first-ever China price reduction, cutting non-coffee iced drinks by an average of 5 yuan.

CEO Brian Niccol‘s “Back to Starbucks” strategy faces scrutiny as the company reported five consecutive quarters of underperformance through the second quarter of 2025.

According to Benzinga Edge Stock Rankings, Starbucks scores in the 68th percentile for Momentum and 36th for Growth. See how it stacks up against competing restaurant stocks here.