Luckin Coffee Gains Market Share as Rivals Struggle
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.
