In India, coffee is not just a beverage, but an emotion that has helped us build memories. And that is the reason all the leading brands have established themselves in the Indian market. From Starbucks to Cafe Coffee Day, the range is pretty vast. But in the most recent news, the buzz has been that Starbucks, the international coffeehouse chain is about to exit the Indian market. Scroll down to read the truth.
There have been reports that due to high operating costs and low profitability with a deviation from Indian consumer preferences, Starbucks is planning to exit the Indian market. The buzz has been due to high rentals, imported ingredients, and price-conscious customers, the brand is facing losses and has decided to exit the Indian market.
In response to the buzz, Tata Consumer Products Ltd on December 19 told media that reports of Starbucks looking to exit India are “completely false and baseless”.
Tata’s relationship with Starbucks stands strong with shared values and commitment to India, the FMCG company said.
As per a report by a business media house, Sales at Tata Starbucks rose 12% to Rs 1,218 crore in the last financial year, while its net loss widened to Rs 80 crore rupees from Rs 25 crore. In the first half of this year, revenue rose only marginally. Tata Starbucks, a joint venture between US coffee brand Starbucks and the Indian conglomerate, operates the largest cafe chain in the country with more than 450 outlets. Starbucks is known for its wide range of coffee blends. From latte to cappuccino, they offer flavourful range of coffee drinks in both hot and coffee variety.
According to business insights provider Tofler, in the last financial year Tata Starbucks revenue had more than doubled compared to four years ago.
The buzz about Starbucks exit also mentioned that Indian consumers usually prefer cheap, local substitutes such as chai, filter coffee and local cafes, which suit their preferences and culture better. And such factors have sparked rumours of the company’s exit. It further says that to stay in business, Starbucks needs to adapt and be able to offer lower prices, local menus, and streamlined operations that fit the Indian market.
What do you think of such rumours? Share your feedback in the comments section.
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