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Starbucks sales growth stable, despite UberEats deal, plans for expansion in China

FILE PHOTO: A Starbucks store is seen in the Tom Bradley terminal at LAX airport in Los Angeles, California, United States, October 27, 2015. REUTERS/Lucy Nicholson/File Photo

(Reuters) – Starbucks Corp (SBUX.O) said on Thursday the cooperation with UberEats for the delivery of approximately 3,500 U.S. stores, and would nearly double its outlets in China over the next four years, but predict that same-store sales would remain stable, sending shares down 3 percent.

The company said it expects global same-store sales growth of 3 percent and 4 percent per year in the long term, roughly in line with a forecast that estimates of revenue growth to be at the bottom of 3 percent to 5 percent this year.

Starbucks has been struggling to lure guests in restaurants as it faces fierce competition from smaller coffee chains that offer exotic coffees and fresh food.

In his attempt to the competition, the Seattle-based chain that owns about 14,000 restaurants in the U.S. the renovation of its owned and licensed by companies, to improve the supply, the conclusion of Teavana stores, laying off employees and adding new dishes and drinks on the menu.

The last delivery initiative, which will start from the beginning of 2019, builds on a pilot program launched in Miami, in September, the company said.

The company said last month was the collaboration with UberEats to deliver coffee and food in Tokyo, as part of its plan to boost sales in Japan, one of the largest in the Asia-Pacific region.

Starbucks also said on Thursday it would increase its presence in China, the fastest growing market, 6.000 shops spread over 230 cities in the next four years, from 3,600 stores in 150 cities.

Starbucks has a partnership with Alibaba Group Holding Ltd (BABA).N) earlier this year to deliver food and coffee in China, as it looks to compete with the local coffee chains.

The world’s biggest coffee chain’s shares fell 3 percent to $64.84 in after-hours trading.

Reporting by Aishwarya Venugopal and Nivedita Balu in Bengaluru; Editing by James Emmanuel

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