Starbucks Isn’t Leaving India—Here’s What’s Brewing Next
Tata Consumer Products dismisses rumors of Starbucks' exit from India, reaffirming its commitment to the market. Despite challenges, Starbucks aims for 1,000 outlets by 2028, with adjusted expansion plans and a focus on long-term growth.
Starbucks Isn’t Leaving India—Here’s What’s Brewing Next
Tata Consumer Products (TCP), the joint venture partner of Starbucks in India, dismissed recent speculation about the coffee giant potentially withdrawing from the country.
Speaking to CNBC-TV18 on December 19, TCP termed reports suggesting Starbucks’ exit as “false and baseless.” The company reaffirmed its strong partnership with Starbucks, highlighting shared values and a commitment to the Indian market.
On December 15, Reuters reported that TCP might delay opening some new Starbucks stores in India due to lower footfalls and economic challenges. TCP CEO Sunil D’Souza stated that the company would adjust its short-term expansion strategy. Instead of the planned 100 new stores this year, the company now aims to open 80, with the remaining rolled over to the next financial year.
By 2028, Tata Starbucks remains committed to achieving its goal of operating 1,000 outlets across the country.
Currently, Tata Starbucks operates more than 450 stores in India, a figure that has more than doubled in the last four years. However, D’Souza pointed out challenges in securing high-quality locations with sufficient foot traffic, which he identified as a significant constraint. The company has strengthened its team to scout potential real estate opportunities and prepare for future store launches.
Despite economic pressures, Starbucks India experienced a 12 per cent increase in sales during the previous financial year, generating $143.6 million in revenue. However, revenue growth in the first half of FY24 has been slower.
D’Souza expressed confidence in the long-term potential of India’s coffee market, noting that coffee culture is still emerging in the country. He highlighted that India’s cafe density remains lower than that of other Asian markets, such as Indonesia, Vietnam, and the Philippines.
In addition to Starbucks, Tata Consumer Products anticipates double-digit revenue growth in the second half of the financial year. However, profitability could face challenges due to rising raw material costs, including tea prices.
