Starbucks Corp’s India unit is adding stores and offering new items like protein foam coffee to boost its footprint in the world’s most-populous country, undeterred by widening losses, a Bloomberg report said on Friday.
The business, already India’s largest coffee chain by store count, will prioritise expansion over profitability as investment accelerates, Tata Starbucks’s chief executive officer Sushant Dash told Bloomberg in an interview . The company is an equal joint venture between Starbucks and the Tata group.
“India remains a focus area as much if not more,” Dash said, noting the market ranks among Starbucks’ top five globally. The unit has turned cash positive, he added, while declining to give a timeline for profits.
Starbucks is doubling down on India despite fierce local competition and a slowdown in consumption demand, as it searches for new markets to revive growth. The Seattle-based chain is streamlining operations in the US while grappling with consumer boycotts in West Asia. Last year, it sold a 60 per cent stake in its China business.
In India, losses at Tata Starbucks nearly doubled in the year to March, reaching ₹1.5 billion ($16.5 million), even as revenue rose 4.8 per cent, according to data platform Tofler. The venture also faces a wave of nimble local upstarts luring coffee drinkers — from no-frills brand abCoffee to specialty coffee roasters like Blue Tokai.
Same-store sales growth, a key industry metric, was at 3 per cent for two straight quarters, partner Tata Consumer Products Ltd said in its earnings call last month, after posting year-on-year declines previously. It also added 12 new stores, pushing the tally to 504 stores across 81 Indian cities.
Taking a leaf out of its global playbook — it offered egg rolls in Singapore for Lunar New Year — Tata Starbucks is localising menus with regional flavours.
It is selling Malabar egg roast and keema variants in southern India, mutton dish Kosha Mangsho-inspired wrap in Calcutta and Vada Pao-style buns in Mumbai.