Apple holds up well as Covid-Zero hits China sales at Starbucks, Nike, and Gucci 

Lockdowns hammer consumer demand in the world’s second-largest economy

Apple held up best among the major foreign brands in China. Picture: Toru Hanai/Bloomberg

Global consumer giants selling everything from jewellery to T-shirts saw sales in China tumble in their most recent quarter as Covid-Zero lockdowns hammered consumer demand in the world’s second-largest economy.

Starbucks was particularly hard hit, reporting a more than 40% drop in sales in its latest quarter. The company began the period with about a quarter of its Chinese stores shut due to Covid policies, and its 940 locations in Shanghai were locked down for about two-thirds of the financial quarter.

Luxury goods also bore the brunt of Covid chaos. Burberry, Richemont, Adidas each reported at least a 35% drop in their most recently reported quarterly results. 

Kering, which owns Gucci, saw a more than 30% drop. Yum China Holdings and Uniqlo fared slightly better, with declines of about 13% each.

Apple held up the best among major foreign brands, with Greater China sales slipping just 1.1% in its third quarter, though the company did offer a rare sale of some top-tier iPhones and related accessories last month in an acknowledgment of weak local sentiment.

For many brands, the most recent quarter captures the unprecedented two-month shutdown of the financial hub of Shanghai, which came to exemplify the lengths Chinese authorities would go to in order to stamp out the virus. 

While there’s been some pick up in demand since the worst of the city’s curbs were eased, flareups in other parts of the country have been met with harsh containment measures, damping consumer sentiment and hurting retail sales.

Bloomberg