Starbucks to Nike report steep China sales drop on lockdowns

Bloomberg

Global consumer giants selling everything from jewellery to t-shirts saw sales in China tumble in their most recent quarter as Covid Zero lockdowns hammered consumer demand in the world’s second-largest economy.
Starbucks Corp was particularly hard hit, reporting a more than 40% drop in sales in the quarter ended on July 3. The company began the period with about a quarter of its Chinese stores shut due to Covid policies, and its 940 locations in Shanghai were locked down for about two-thirds of the financial quarter.
Luxury goods also bore the brunt of Covid chaos. Burberry Group, Richemont, Adidas AG each reported at least a 35% drop in their most recently reported quarterly results.
Kering SA, which owns Gucci, saw a more than 30% drop. Yum China Holdings Inc and Uniqlo fared slightly better, with declines of about 13% each.
Apple Inc held up the best among major foreign brands, with Greater China sales slipping just 1.1% in its third
quarter, though the company did offer a rare sale of some top-tier iPhones and related accessories last month in an
acknowledgment of weak local sentiment.
For many brands, the most recent quarter captures the unprecedented two-month shutdown of the financial hub of Shanghai, which came to exemplify the lengths Chinese authorities would go to in order to stamp out the virus.
While there’s been some pickup in demand since the worst of the city’s curbs were eased, flareups in other parts of the country have been met with harsh containment measures, damping consumer sentiment and hurting retail sales.
Starbucks’ chairwoman for China, Belinda Wong, described the recent quarter as “pretty difficult,” with mobility restrictions and lockdowns implemented faster and eased more slowly under Covid Zero, and the company expects its recovery will be nonlinear.