Tata Consumer calls reports of Starbucks exiting India ‘baseless’

Tata Consumer has responded to reports that claimed that Starbucks is exiting India due to high costs and mounting losses. This comes after reports that the coffee chain is pushing back plans for some new Starbucks store openings until later in its existing schedule.

According to a report in Reuters, Tata Consumer has called reports of Starbucks exiting India, ‘baseless’. 

Meanwhile, shares of Tata Consumer Products Ltd were trading 0.69 per cent higher at Rs 915.60 today. At this mentioned price, the stock has slipped 14.16 per cent in the calendar year 2024 so far.

STARBUCKS’ PRESSURE POINTS

According to a separate report earlier this week in Reuters, fewer customers are walking into cafes, which has coerced Starbucks to recalibrate its plan to open more stores. 

Tata Consumer CEO Sunil D'Souza told the news agency last week: “We will calibrate for the short term — maybe instead of opening 100, we will open 80 now, and next year we will open 120 instead of 100.” However, Starbucks is still focussed on its goal to open 1,000 stores by 2028.

"In India, good quality real estate with traffic... is a challenge," he said, contrasting that to 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.

In the last financial year, Starbucks reported a 12 per cent increase in sales, reaching $143.6 million, however 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 Tofler, Starbucks' revenue in the last financial year had more than doubled compared to four years ago.