Tag: Global Coffee Chains

Coca-Cola Makes Last-Minute Effort to Revive Costa Coffee Sale Talks

Posted on by Qahwa World

London – Qahwa World

Coca-Cola is reportedly making a final attempt to keep negotiations alive over the potential sale of Costa Coffee, as discussions with its preferred buyer have slowed due to disagreements on valuation.

According to international media reports, talks between the US beverage group and London-based private equity firm TDR Capital have reached an impasse. TDR, the owner of UK supermarket chain Asda, was recently named the leading contender to acquire Costa Coffee. The proposed transaction would reportedly cover Costa’s UK and global operations, while excluding its approximately 300 stores in China.

Sources familiar with the matter indicate that Coca-Cola is seeking a valuation close to $2 billion for the 4,200-store coffee chain. This figure represents a significant reduction from the $4.9 billion the company paid when it acquired Costa Coffee in early 2019. A final decision on the future of the brand is expected before December 21, 2025.

In an effort to secure an agreement, Coca-Cola is said to be open to alternative deal structures, including the sale of a controlling stake rather than a complete exit.

The company began formally reviewing strategic options for Costa Coffee in August 2025. The move followed comments from outgoing Chief Executive James Quincey, who acknowledged to investors that the performance of the coffee business had fallen short of expectations and had not delivered the returns initially anticipated.

Several investment groups have previously expressed interest in Costa Coffee. These include US-based Bain Capital and China’s Centurium Capital, which owns Luckin Coffee. Other major private equity firms, including Apollo and KKR, are understood to have withdrawn from the process in recent months.

Luckin Coffee Eyes Fresh U.S. Listing Five Years After Accounting Scandal

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The Chinese coffee giant moves to regain investor confidence and global credibility following a dramatic turnaround that made it China’s largest coffee chain.

Dubai – Qahwa World

China’s Luckin Coffee is reportedly preparing to return to Wall Street, five years after its dramatic delisting from the Nasdaq amid one of the country’s most notorious corporate accounting scandals.

Speaking at a government-hosted event in Xiamen on 2 November 2025, CEO Jinyi Guo said the company was “actively pushing the process of relisting on a U.S. main board,” though he declined to specify a timeline. Market observers believe the relisting could take place either on the New York Stock Exchange or Nasdaq, marking a significant milestone in the company’s comeback story.

Founded in Beijing in 2017, Luckin first listed in the United States in May 2019, raising $561 million to fund its breakneck expansion to 4,500 stores across China. But by April 2020, revelations emerged that the company had fabricated roughly $340 million in sales, triggering a collapse in its stock price, the dismissal of its senior management, bankruptcy filings in the U.S., and a $180 million fine by the U.S. Securities and Exchange Commission.

Under new ownership by Beijing-based private-equity firm Centurium Capital, Luckin launched a sweeping turnaround plan focused on profitable growth, tech-driven operations, and stricter financial oversight. The strategy began paying off in 2022, when the company reported its first quarterly net profit and emerged from bankruptcy shortly thereafter — a milestone that paved the way for its first annual operating profit later that year.

By 2023, Luckin Coffee had overtaken Starbucks in China’s fiercely competitive coffee market, fueled by rapid franchise expansion and affordable pricing. As of mid-2025, the brand operates over 26,000 stores across China and continues to extend its international presence with outlets in Singapore, Malaysia, and its first U.S. location.

A potential U.S. relisting, analysts say, could provide Luckin with fresh access to capital markets, boost brand visibility, and restore investor confidence still clouded by its past misconduct. Yet the move will not be simple: any overseas listing by a Chinese firm now requires filing with the China Securities Regulatory Commission (CSRC), part of Beijing’s tightened oversight of foreign capital operations.

As of March 2025, 286 Chinese companies were listed on U.S. exchanges with a combined market capitalization of around $1.1 trillion, according to the U.S.–China Economic and Security Review Commission. Luckin’s move, therefore, would mark one of the most high-profile returns of a Chinese consumer brand to U.S. markets since the scandal-scarred delistings of 2020.

Earlier this year, Chinese tea brand Chagee raised $411 million in its Nasdaq IPO — a sign that global appetite for Chinese beverage players may be returning. Whether Luckin Coffee can brew up a similar success story on Wall Street remains one of the most closely watched comebacks in the coffee industry.

Luckin Coffee Gains Market Share as Rivals Struggle

Posted on by Qahwa World

Dubai, September 5, 2025 (Qahwa World) – Luckin Coffee continues its rapid ascent in the global coffee industry, expanding aggressively while key competitors like Starbucks face declining sales.

The Chinese coffee chain, which has already surged ~35% this year, recently entered the U.S. market with new stores in New York City. This move comes as Starbucks undergoes a difficult transformation in both its American and Chinese operations.

Strong Same-Store Sales Growth

Luckin Coffee reported a 13% year-on-year increase in same-store sales at company-owned outlets in Q2 2025. This marks its fourth consecutive quarter of acceleration, rising from a decline in late 2024. In comparison, Starbucks posted a 2% sales decline in the U.S. and only 2% growth in China, where it introduced discounts to counter Luckin’s aggressive promotions.

By outperforming Starbucks’ same-store sales growth by 11 percentage points, Luckin has proven resilient in a strained global economy where many restaurant chains are seeing contractions.

Aggressive Expansion Strategy

The company’s expansion strategy remains unmatched. In Q2 alone, Luckin opened 2,109 new stores, lifting its total footprint to 26,200 – a 31% year-on-year increase. Over the past year, Luckin has added more than 6,200 stores, averaging 17 openings per day.

In contrast, Starbucks expanded its network by just 5% over the same period, adding 1,600 stores worldwide. Luckin’s U.S. debut has been met with favorable reviews, with New York outlets receiving 4–5 star ratings on Google and Yelp.

With RMB 8.2 billion ($1.1 billion) in cash reserves and no debt, Luckin has ample resources to finance its ambitious global rollout.

Differentiation: Menu Innovation and Value Pricing

Luckin distinguishes itself through a bold menu and competitive pricing. While offering classic beverages, it experiments with unique flavors – from fruity Americanos to limited-edition drinks like Roast Duck coffee in China.

Equally important is its pricing advantage: brewed coffee at its U.S. outlets starts at $3.45, below the average price in many American cities. This value-driven approach has fueled customer growth while maintaining a 21% store operating margin.

Valuation Advantage

Despite its momentum, Luckin trades at a far lower valuation than U.S. peers. Its price-to-earnings ratio is around 19x, half that of Starbucks. On revenue multiples, Luckin is valued at a quarter of fast-growing competitor Dutch Bros, even though it is expanding at a faster pace.

Risks and Outlook

While Luckin’s history includes challenges—such as price wars and over-discounting in 2024—the company has since shifted strategy to balance promotions with profitability.

Analysts see more upside than downside as Luckin strengthens its position in China while expanding overseas. Its combination of innovation, affordability, and financial strength makes it one of the most compelling players in the global coffee industry today.