Luckin Coffee, a Chinese coffee chain that has overtaken Starbucks as the largest coffee chain in China, is expanding to the US market with plans to sell its signature low-cost drinks for $2 to $3. This new entrant threatens Starbucks’ dominance in American coffee-drinking culture, which saw millions of customers leave the brand last year due to high prices and long wait times.
Luckin’s expansion into the US comes at a critical time for Starbucks, which reported sales fell again in January, marking its fourth straight quarterly drop. The company is trying to fix past missteps by appointing new CEO Brian Niccol, who has overseen significant changes, including axing drinks from menus and laying off employees.
However, Luckin’s aggressive expansion strategy, fueled by ultra-low prices and a mobile-first ordering system, poses a significant challenge for Starbucks. The Chinese brand plans to lure coffee drinkers away from other US-based chains, such as Dunkin’ Donuts ($2.15 to $3.50 average coffee price), Tim Hortons ($3 average price), and Dutch Bros ($5.25 average price).
Despite facing new competition, Starbucks is bucking market trends with a 7% rise in stock price in 2025. The company’s new CEO has adopted a “fundamentally changed” business approach, aiming to improve customer experience and increase sales.
Luckin Coffee, however, has its own challenges. Founded in 2017, the brand experienced turbulence after emerging from bankruptcy in 2022. Despite this, it has rapidly expanded its scale in China, opening an average of 16 stores every day since mid-2023.
Source: https://www.dailymail.co.uk/yourmoney/article-14515461/starbucks-threat-luckin-coffee-china-chain-expands-us.html