Starbucks, a US-based coffee chain, reported a 12% growth in sales to INR 1,218 crore, but losses widened to INR 81.84 crore for its operations in India in FY24.
In India, the brand operates under ‘Tata Starbucks Pvt Ltd‘, a joint venture with Tata Consumer Products, in which both entities hold an equal stake.
According to its latest annual report, Tata Consumer Products bore half of the total loss, amounting to INR 40.91 crore.
A year ago, it had incurred a loss of INR 24.97 crore with sales totaling INR 1086.89 crore.
“The year saw a decline in demand across the Quick Service Restaurant (QSR) sector, leading to subdued growth in our same-store sales,” stated the company in its annual report.
The report further mentioned, “Profitability remained subdued due to the decline in demand across the overall Quick Service Restaurant (QSR) sector.”
During this year, Starbucks opened 95 new stores, exceeding last year’s record of 71 expansions. Their expansion efforts reached 20 new cities, including tier 2 cities. Consequently, the coffee brand now boasts a total of 421 stores spread across 61 cities in India.
Continue Exploring: Starbucks continues expansion in India, opens its first outlet in Manali
In the fiscal year 2023, Tata Starbucks achieved sales of over INR 1000 crore, marking the first instance since its entry into the Indian market in 2012.
“In the fiscal year 2023-24, Tata Consumer Products has witnessed significant milestones across various fronts. Our innovative approach has resulted in a fivefold increase in revenue from innovation within the Indian business over the last three years,” remarked N. Chandrasekaran, Chairman of Tata Consumer Products, addressing shareholders in the company’s annual report for 2023-24.
Starbucks plans to inaugurate 1000 stores in India by 2028. CEO Laxman Narasimhan stated in January of this year that Starbucks intends to launch a new café every third day in India to achieve this objective.
Continue Exploring: Starbucks CEO bullish on India’s coffee market, targets 1000 cafes by 2028
Emerging players such as Pret a Manger, Tim Hortons, and Third Wave Coffee are also expanding their presence in the Indian market by adding more stores.
Under a franchise agreement with Reliance Brands, the British coffee and sandwich chain Pret a Manger currently operates 11 stores in India. Its goal is to inaugurate as many as 100 outlets over the next five years.
The Canadian coffee chain, Tim Hortons, plans to establish over 100 stores within the next three years. Meanwhile, Third Wave Coffee has already surpassed the milestone of 100 stores.
Continue Exploring: TATA Starbucks launches global favourite refreshers in India