Howard Schultz: We Have Established Starbucks As A Brand Of Luxury And Choice Within China

Starbucks Corporation SBUX declared great fourth-quarter results on Friday, following which Howard Schultz, Starbucks president and CEO, was on CNBC to discuss the earnings and explain how Starbucks has differentiated itself from competitors over the years in China.

“Well, first of we are coming of an extraordinary quarter for holiday, which we prepared all year for it,” Schultz said. “It’s very unusual to have every business unit and every geography exceed expectations. So, we were extremely pleased with holidays. In terms of the back half of the year, we have plans in place that we think are going to be incremental.”

He continued, “Mobile ordering pay, delivery, coffee is now in our favor and we feel that we are set up very well to have a very excellent year and I think we're all are humbled by the response or reaction that the market has had to our performance.”

What Are You Doing Right In China That Others Are Not?

“Well, you have to remember, we have been in China for 15 years and all during that time we have laid the foundation to build a brand, to have a local Chinese team managing the business and we have established Starbucks as not only the leading purveyor of coffee, but a brand of choice and luxury within China," Schultz replied. "As I mentioned on our call [Thursday] we now have 320 stores alone in Shanghai, which is the largest market in the world for Starbucks. We had 8 percent comps in the CAP region and most of it was traffic,” Schultz replied.