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Starbucks hits back at Luckin with delivery expansion in China

US chain will not slash prices despite competition from upstart

NEW YORK -- Starbucks is pouring more resources into its delivery service in China, launched last fall, as the U.S. giant looks to counter the strategy of local upstart Luckin Coffee in its second-biggest market.

Kevin Johnson, CEO of the Seattle-based coffee chain, said in a Thursday earnings call that Starbucks aims to expand deliveries to 3,000 stores in 50 Chinese cities by the end of this fiscal year. The company refused to quantify the investment required, but analysts expect that the costs of expanding the service could hit group margins in China. Starbucks has 3,600 stores in more than 150 cities in the country.

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