Starbucks Shutters 2,000 China Branches in Face of Coronavirus Threat

People wearing protective face masks walk past a closed Starbucks coffee shop at a grocery in Beijing on January 29, 2020. - People in Beijing and across China are donning masks, spraying antiseptic and staying off the streets in a battle to halt the spread of a viral outbreak that …

Starbucks has temporarily closed half of its China outlets in an effort to support the government’s push to contain the coronavirus while protecting its staff from the growing threat of infection.

The coffee chain has almost 4,300 outlets in China, making it the company’s largest market outside the U.S. and it has warned the rapidly expanding virus is likely to affect its financial performance.

Starbucks chief executive Kevin Johnson said Tuesday the firm was “navigating a very dynamic situation,” the BBC reports.

The firm told Wall Street analysts it had been planning to adjust its annual profit forecasts after a better-than-expected first quarter performance but decided against changing its projections due to the virus.

Starbucks’ disclosure about its China shutdowns comes at a time of nervousness about the financial implications of the coronavirus, which originated in the central Chinese city of Wuhan and multiplied throughout the country and abroad.

Food and beverage companies are among the most exposed, the Financial Times reports. KFC, Pizza Hut and McDonald’s have also closed outlets, with the latter expected to divulge more details about its exposure in an earnings report on Wednesday.

Starbucks has been among the most aggressive of western chains in expanding in China. Kevin Johnson, chief executive, has sought to capitalise on a growing taste for coffee and rising middle class.

He described the virus-related disruption as temporary and said the company remained “committed to the long-term opportunity” in the country.

Figures published on Tuesday showed Starbucks opened more than 600 outlets in China in 2019, helping total revenues in the country rise 13 percent to $745m, according to the FT.

Chinese authorities say a surge in cases of the rapidly spreading coronavirus in recent weeks has sickened nearly 6,000 people as of Wednesday, with more than 130 deaths.

Additional cases have been reported beyond China, including in Australia, France, Canada, the Middle East, and the U.S., as Breitbart News reported.

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