Tata Starbucks on Friday reiterated its dedication to the Indian market, dispelling speculation of a potential exit. The company affirmed that India remains a strategic growth area for Starbucks globally, despite recent financial challenges linked to expansion.
In response to media reports suggesting that the coffee chain was planning to withdraw from India, Tata Consumer Products Ltd. (TCPL), Starbucks’ joint venture partner, termed the claims “baseless.” Tata Starbucks, a 50:50 joint venture between TCPL and Starbucks Corporation, currently operates over 470 stores across 76 cities in India.
“Starbucks is fully committed to the Indian market. Any statements suggesting otherwise are false,” Tata Starbucks stated.
The company reported a 12% increase in revenue to ₹1,218.06 crore for FY24. However, losses widened to ₹79.97 crore, up from ₹24.97 crore in FY23, primarily due to expansion-related expenses. Advertising and promotional costs rose 26.8% to ₹43.20 crore, while royalty payments amounted to ₹86.15 crore, according to data from business intelligence platform Tofler.
TCPL’s Managing Director and CEO, Sunil D’souza, emphasized that the focus remains on scaling up the Starbucks brand in India rather than immediate store profitability. “Store profitability is not an issue. As we scale, we know we can generate profits,” D’souza told PTI in November.
Starbucks, which entered India in October 2012, continues to expand despite challenges posed by operating costs and competition from local alternatives. The reaffirmation of commitment from Tata Starbucks highlights the coffee giant’s long-term vision for the Indian market and its growth potential.