Tata Consumer calls reports of Starbucks’ exit from India ‘baseless’

Tata Consumer has responded to reports claiming that Starbucks will exit India due to high costs and rising losses. This comes after reports that the coffee chain is delaying plans to open some new Starbucks stores until later in its current schedule.

According to a report in Reuters, Tata Consumer has termed reports of Starbucks’ exit from India as “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 is down 14.16 percent in the 2024 calendar year so far.

Starbucks pressure points

According to a separate report earlier this week in Reuters, fewer customers are entering cafes, which has forced Starbucks to reset its plan to open more stores.

“We will calibrate in the short term – maybe instead of opening 100, we will open 80 now, and next year we will open 120 instead of 100,” Tata Consumer CEO Sunil D’Souza told the news agency last week. However, Starbucks remains focused on its goal of opening 1,000 stores by 2028.

“In India, quality real estate and traffic are a challenge,” he said, comparing this to the “massive development of shopping malls” in China. Despite the challenges, Tata Consumer CEO remains optimistic about the long-term prospects of their coffee investments.

In the last fiscal year, Starbucks reported a 12 percent increase in sales, to $143.6 million, but its net losses widened. The company’s revenues 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 fiscal year more than doubled from four years ago.