Luckin Coffee expands to US, threatening Starbucks' dominance

Starbucks is facing a new challenge as a Chinese coffee chain, Luckin Coffee, plans to expand into the United States. Luckin Coffee is popular in China and is known for its low prices, offering drinks for $2 to $3. In comparison, Starbucks charges about $6 to $7 for a cup of coffee in New York. The timing of Luckin's expansion comes at a difficult moment for Starbucks. The company has seen its sales drop for four consecutive quarters, causing many customers to leave due to high prices and long wait times. Luckin Coffee's growth could also attract customers away from other coffee brands like Dunkin' and Tim Hortons. Luckin Coffee has grown rapidly in China, increasing its locations to over 22,000 in just two years. This is three times the number of Starbucks locations in China. The company's CEO, Jinyi Guo, has indicated plans for global expansion, including the US market. In response to its struggles, Starbucks has recently appointed Brian Niccol, the former CEO of Chipotle, as its new leader. He is implementing changes to improve the business, including reducing menu items and reorganizing staffing. Starbucks hopes that new offerings, like using ceramic cups for in-store orders, will encourage more customers to visit their cafes. Despite losing customers last year, Starbucks' stock price has increased by about 7% in 2025, even as the overall market has declined. Luckin Coffee, meanwhile, has faced its own issues, including a fraud scandal in 2020 that impacted its growth. However, since recovering from bankruptcy in 2022, the company has successfully expanded its operations in China.