Tata Consumer has responded to reports of Starbucks exiting India due to high costs and mounting losses. This comes after reports that the coffee chain is pushing back plans for new Starbucks store openings until later in its existing schedule.
According to a Reuters report, Tata Consumer has termed reports of Starbucks exiting India as 'baseless'.
Meanwhile, a share price of Tata Consumer Products Limited rose by 0.69 percent to Rs 915.60 today. At this quoted price, the stock is down 14.16 percent year-to-date in calendar year 2024.
Starbucks' pressure points
According to a separate Reuters report earlier this week, fewer customers are traveling to restaurants, forcing Starbucks to recalibrate its plan to open more stores.
Tata Consumer CEO Sunil D'Souza told the news agency last week, “We will calibrate in the short term – maybe instead of opening 100 we will open 80 now, next year we will open 120 instead of 100.” However, Starbucks is still focused on its goal of opening 1,000 stores by 2028.
“In India, good quality real estate with traffic … is a challenge,” he said, contrasting it with the “massive development of malls” in China. Despite the challenges, Tata Consumer's CEO remains optimistic about the long-term prospects of their investment in coffee.
Last fiscal year, Starbucks reported a 12 percent increase in sales to $143.6 million, though its net loss widened. The company's revenue in the first half of this year showed only a slight increase.
According to data from business insights provider Toffler, Starbucks' revenue in the last fiscal year more than doubled compared to four years earlier.