Starbucks India wants to match scale of Chinese outlets
What's the story
Starbucks India, in partnership with Tata Consumer Products Ltd (TCPL), is gearing up to resume its aggressive store expansion strategy. The announcement comes after a two-year period of adjusting its business model amid a broader slowdown in discretionary spending. Sunil D'Souza, Managing Director and CEO of TCPL, revealed this development while speaking to PTI.
Strategic adjustments
Opportunity to recalibrate business model
D'Souza explained that Starbucks India took the last 18-24 months as an "opportunity to recalibrate" its entire business model.
This included everything from store size and capital expenditure per outlet to beverage pricing.
He said things have "started to fall into place" now, with Tata Starbucks witnessing four consecutive quarters of same-store sales growth.
Growth strategy
Aggressive store expansion on the cards
With the recent success, D'Souza has confirmed that Starbucks India will be resuming its aggressive store expansion strategy.
He said, "We had four successive quarters of same-store sales growth now, and we are seeing acceleration coming in. Now, we will again start to expand the number of stores aggressively."
The company previously aimed at opening around 100 Starbucks stores annually but slowed down due to weaker demand across discretionary consumption and QSR segments.
Market approach
Focus on increasing store density in existing markets
The renewed expansion strategy will focus on both new store additions and increasing density in existing markets.
Starbucks currently operates in around 80 cities, which D'Souza thinks is a "good number" for operations.
He hinted at limited additions to the city count going forward but emphasized that there would be a significant increase in store density within these cities.
Future goals
Aiming for similar scale as China
D'Souza also revealed TCPL Chairman N Chandrasekaran's long-term ambition for Tata Starbucks to eventually match the scale of Starbucks in China, which has around 8,000 stores.
In the June quarter alone, Tata Starbucks reported 11% revenue growth and opened four new outlets including two Reserve outlets in Kolkata and New Delhi as part of its premium portfolio.