(Yicai) Jan. 31 -- Starbucks has no intention to get involved in the Chinese coffee market's price wars despite failing to meet analysts' global revenue expectations in the quarter ended last month, The Paper reported today, citing Belinda Wong, chairwoman of Starbucks China.

Many coffee brands joined price wars amid the increasingly fierce competition in the Chinese market of coffee and tea drinks and clearly, Starbucks is not free from pain. In the first quarter of fiscal 2024, sales in China stores rose by 10 percent year-over-year, but each transaction averaged 9 percent less.

Starbucks has launched several campaigns to increase consumers' frequency of purchases, Wong said, adding that consumers are becoming more cautious about their expenditures which also contributed to the declining sales of more pricey products.

The Seattle-headquartered coffeehouse released its latest earnings report yesterday. Revenue climbed by 8 percent to a record high of USD9.4 billion in the quarter ended Dec. 31, 2023, still failing to meet analysts' expectations. Starbucks China fared better with an 18 percent boost to USD735 million.

Starbucks China will make its way to lower-tier cities, opening new stores in counties at a faster pace, per Wong. "Over the past few years, the profitability of our new stores in county-level cities has been better than that of stores in first-tier large cities," she explained.

The company opened almost 170 new mainland stores during the quarter, entering 28 new counties. Starbucks said earlier that its goal is to have 9,000 stores in China by 2025. As of now, the number is over 7,000.

The American parent has lowered its expectations for the fiscal year. Global growth could tally 7 to 10 percent, down from the earlier prediction of 10 to 12 percent. From the second to the fourth quarter, the Chinese market should widen slower than the previous forecast of 4 to 6 percent.

Editor: Emmi Laine