But on the ground here, I’m happy to report that people are going back to work at their offices. You see foot traffic recovering and ramping up in commercial areas. You see people going back to cinemas to watch movies, and there’s just a lot more social activities and gatherings, right, starting to and domestic trips and now starting with international as well. So — but most importantly, we’re seeing customers coming back to our stores. They’re returning to our stores to enjoy the Starbucks Experience. And I want to say that all our stores are open and can operate fully now without any restrictions on operations or operating hours, and we can now fully reengage meaningfully and consistently without any disruptions with our customers and our SR members to drive visit in frequency and deliver our best Starbucks experience.
We can now go full steam with our new store development, and we can continue to maximize our omnichannel capability and opportunities to be a part of our customer new regular routine post-COVID. So all are very promising signs. And I just want to end by saying Starbucks is best positioned to capture the future growth opportunities ahead in China. And I’m so confident and more confident than ever of delivering the plan and strategies we shared during Investor Day and achieve 9,000 stores by 2025. Thank you.
Operator: Thank you. Your next question comes from Andrew Charles with Cowen. Please go ahead.
Andrew Charles: Great. Thank you. Howard, best wishes on your next chapter and congrats on all that you’ve accomplished in Starbucks.
Howard Schultz: Thank you.
Andrew Charles: Rachel, just given that China is a 100% company operated business, I wanted to learn about how we should think about the reopening — the operating leverage of the reopening. Is it fair to say that when you return to 2019 China sales volumes that you — that would allow you to get back to 2019 China store level margins? Or is it wrong to think that margins can rebound above this level when you get back to 2019 volumes, just given the inroads you’ve made with digital and other efficiencies in the business. And what I’m really trying to get at here is that if the China sales recovery gets back to 2019 levels, does this allow you to return to the prior long-term operating margin target of 17% to 18%? Thanks.
Rachel Ruggeri: Sure. What I’d say, Andrew, is that we do expect to have margin expansion in China, and that will be driven by the recovery as well as the growth we’re seeing beyond recovery. But in terms of a margin expectation, we would expect margin to actually be different than what we saw in 2019 as you see the growth in digital. Just to give you an example, in 2019, digital was about 10% of overall sales in the market. It’s now closer to 50%. So that has a different margin structure to it. We know it leads to more overall dollars in overall volume, but it does change the margin structure. But despite that, when you take China and where we’re expecting from a recovery standpoint, both this year and beyond, that leads us to the solid margin expansion we’re talking about for total company this year as well as the progressive margin expansion that we spoke about at Investor Day.
So it will be one part of the whole collective that will allow us to have that expansion over the long-term.
Operator: Thank you. Your next question comes from Peter Saleh with BTIG. Please state your question.
Peter Saleh: Great. Thanks. And Howard, I echo the congrats as well. I wanted to ask about the labor dynamic in China. I know you guys indicated tonight that there was some staffing challenges with the surge in COVID. But just trying to think in the months and quarters ahead, do you expect to see any staffing shortages. I know you’ve built a lot of stores since pre-COVID. Just trying to understand the staffing situation in that market and the ability to meet demand when it does return?
Howard Schultz: Belinda?
