Whether you’ve purchased a cup of coffee there or passed by it on the way to work, almost every person on this planet has heard of Starbucks. This company is one of the world’s largest coffeehouse chains, and with over 40,000 locations in 80 countries worldwide, it’s hard to miss it.
Starbucks has been around since 1971, when it opened its first coffee shop in Seattle’s historic Pike Place Market. Since then, it has become a multi-billion-dollar company due to its high-quality coffee and iconic menu.
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However, the once-invincible coffee giant has hit a worrisome slump over the last few years, struggling with sales declines and a slowdown in store traffic.
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Starbucks’ store sales fell 2% in the second quarter of 2025, marking the fifth consecutive quarterly decline. Comparable transactions were down 2% compared to last year, while traffic continues to report negative numbers with a 4% decline.
Starbucks and Luckin Coffee at a mall in China.
Image source: Cheng Xin/Getty Images
A Chinese rival coffee chain is ready to take down Starbucks
When Luckin Coffee first entered the coffee shop chain sector, Starbucks (SBUX) wasn’t likely wasn’t concerned, since Luckin only had locations in China. However, after multiple quarters of tumultuous financial results and a recent surprising revelation, it now may have a reason to worry.
Luckin Coffee (LK) is the Chinese version of Starbucks. It was founded in Beijing in 2017 and has grown immensely since then, reaching over 22,000 locations. This Chinese coffee chain is known for its affordable prices, high-quality coffee, and wide range of menu options that could be comparable to Starbucks.
In 2023, Luckin Coffee became the largest coffee chain in China, surpassing Starbucks in the region. Now, it’s ready to dominate another market in which the coffee giant has excelled for decades.
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Luckin Coffee’s blue-and-white deer logo and signs that read “Opening Soon” were spotted in New York City, one at 755 Broadway and another at 800 6th Ave, as seen on Google Maps.
No official date for the grand openings of both locations has been revealed, but since the storefronts are already built, they could open over the next few months. This would allow New Yorkers to try out Luckin Coffee’s menu items and put Starbucks fans’ loyalty to the test.
Coffee chains fight over Starbucks’ crown
Many American coffee chains, such as Dunkin’, Dutch Bros (BROS) , Scooter’s Coffee, and 7 Brew Coffee, to name a few, have tried to overtake Starbucks for years, using every tactic in the book, such as launching new menu items and expanding their footprints.
Recently, these coffee chains have surpassed Starbucks’ store traffic increases, but none has convinced enough of its customers to switch sides, as they remain smaller chains than the giant.
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Just because Luckin Coffee has become incredibly successful in China doesn’t mean it will obtain the same result in the U.S. market. Still, it also doesn’t discount that it could take a chunk of the coffee market if the brand resonates with consumers.
After all, smaller chains have gotten more traffic than ever, while Starbucks shows signs of slipping.
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