Starbucks, Luckin Coffee and Yum China fall after COVID cases in China accelerate
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Starbucks Corporation (SBUX
-3.8%), Yum China (YUMC
-2.5%) and Luckin Coffee (OTCPK:LKNCY
-12.4%) fell on Monday in mid-day trading after China reported its worst jump in COVID cases since the Wuhan outbreak late in 2019.
Chinese health officials reported 2,125 cases on Sunday spread across 58 cities in 19 of 31 mainland provinces. Shenzhen suspended all non-essential business due to the jump in local cases. China has not officially moved off a zero-tolerance COVID policy, meaning that retail traffic could decline.
China coffee watch: Luckin Coffee (OTCPK:LKNCY) said last month that it is moving forward from a position of financial strength and remains focused on the continued execution of the company's growth strategy, while Starbucks (NASDAQ:SBUX) faced an unexpected public relations battle with a store fined for using expired ingredients. Startups like Manner, Seesaw Coffee, Algebraist and M Stand are also trying to break into the Chinese coffee shop market.