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Starbucks CEO Says Chinese Rival Luckin’s ‘Heavy Discount’ Strategy Isn’t Sustainable

From: techcrunch.com

A war of words in the coffee world is brewing after the CEO of Starbucks  claimed Chinese upstart Luckin can’t last just days after it filed for a U.S IPO.

Kevin Johnson, who leads the American coffee giant, told CNBCthat competitors in China including Luckin have adopted a strategy of building market share using “heavy, heavy discounts” that he believes is not sustainable.

“We’re deploying capital and building 600 new stores per year,” he said. We’re “generating the return on invested capital that we believe is sustainable to continue to build new stores at this rate for many years to come.”

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