We’re about to find out just how receptive U.S. consumers will be to one of the fastest-growing chains in the world.
Luckin Coffee on Monday opened its first two locations in the U.S., in New York City. One opened at 755 Broadway, the other at 800 6th Ave., according to posts on an Instagram account devoted to the brand’s U.S. market.
The opening has long been expected. Media reports last year indicated the chain was eyeing a U.S. market opening sometime in 2025 and earlier this year the chain opened a boutique shop. Other reports have indicated that the chain was on the verge of a New York City location.
But the opening brings to the U.S. a fascinating new competitor to a beverage market that is suddenly flush with fast-growing chains.
Luckin emerged in China in 2017 and grew rapidly there. It went public in the U.S. just two years later, only to be found to have faked earnings and sales data. Executives were fired. The company filed for bankruptcy.
It then emerged from bankruptcy with new financing and management and restarted its growth trajectory.
Over the past year, the company has opened more than 5,500 locations and now operates more than 24,000 shops nationwide, all but about 60 of which are in China. It generated more than $1.2 billion in revenues in the first quarter, up 41% from a year earlier.
Luckin’s business model is mostly focused on takeout and mobile order. Customers in Asia cannot order at the counter, for instance. It has also priced its beverages aggressively, which has helped it take market share.
Luckin has said that it plans to offer low-priced beverages in the U.S., at $2 to $3. That could potentially undercut major players like Starbucks and Dunkin’. The average price for an Iced Coffee at Starbucks is $4.46, according to Technomic Price Pulse data. It’s $3.62 at Dunkin’.
But Luckin will also be running into an increasingly competitive U.S. beverage market. Some of the fastest-growing restaurant chains in the U.S. specialize in coffee and other beverages, including 7 Brew, Dutch Bros, Scooter’s and the dirty soda chain Swig. McDonald’s and Taco Bell, meanwhile, are testing expanded beverage programs in their own restaurants.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.