Starbucks Exit Rumors in India: Fact or Fiction?

In India, coffee is not just a drink, but an emotion that has helped us create memories. And that is the reason all the top 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 get out of the Indian market. With high rentals, imported ingredients, and price-conscious consumers, the brand is recording losses and has decided to bid adieu to the Indian market.
In response to the buzz, Tata Consumer Products Ltd on 19 December told media that reports of Starbucks looking to exit India are “completely false and baseless”.
The company has also said, in a statement, “Starbucks is fully committed to the Indian market. Any statements suggesting otherwise are false. TATA Starbucks currently operates more than 470 stores in 76 cities across India, which continues to be a key growth market for Starbucks globally.”
” Tata’s association with Starbucks is strong, both in shared values and commitment towards India” the FMCG company had said.
According to a business media house, Sales at Tata Starbucks have increased by 12% to Rs 1,218 crore in the last fiscal year, while net loss has widened to Rs 80 crore rupees from Rs 25 crore. In the first half of this year, revenue has risen only marginally. Tata Starbucks is a joint venture between US coffee brand Starbucks and the Indian conglomerate and operates the largest cafe chain in the country with more than 470 outlets. They are known for their wide range of coffee blends. From latte to cappuccino, they offer a flavourful range of coffee drinks both in hot and coffee variety.
According to Tofler, business insights provider, in the last fiscal year Tata Starbucks revenue had more than doubled as 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.