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Starbucks India to Accelerate Store Openings After Business Model Recalibration

Tata Starbucks is set to resume an aggressive store rollout in India following nearly two years of restructuring its business model amid a broader slowdown in discretionary consumer spending, according to Tata Consumer Products Managing Director and CEO Sunil D’Souza.

What Happened

Speaking to PTI, D’Souza stated that the 50:50 joint venture between Tata Consumer Products Ltd (TCPL) and US-based Starbucks Corporation used the past 18 to 24 months to recalibrate its operating framework. This review encompassed outlet sizes, capital expenditure per location, and beverage pricing. Following four consecutive quarters of same-store sales growth, the joint venture is now preparing to accelerate store openings once again.

Key Highlights

  • Tata Starbucks operates around 500 cafes in India, with the store count standing at 498 at the end of the June quarter.
  • The company had previously opened roughly 100 outlets annually before moderating expansion due to softer demand in discretionary consumption and the quick-service restaurant (QSR) sector.
  • The renewed strategy will focus on adding stores while building greater density in its existing footprint of approximately 80 cities, with only limited additions to new cities.
  • Operating more than five stores per city is intended to create operational efficiencies across delivery and kitchen logistics.
  • Tata Starbucks reported an 11 per cent revenue increase in the June quarter, opening four new locations, including two Reserve stores in New Delhi and Kolkata.
  • According to TCPL’s latest annual report, the joint venture posted a 7 per cent rise in revenue to Rs 1,367 crore for the year and narrowed its net loss to Rs 98.95 crore.

Why This Matters

The decision to restart aggressive store additions follows a deliberate slowdown to adjust to changing market conditions. By evaluating capital expenditure per outlet and adjusting drink pricing, the joint venture sought to place the brand on firmer footing. D’Souza noted that Starbucks maintains a long operating runway in India. Furthermore, TCPL Chairman N Chandrasekaran indicated at the company’s June annual general meeting a long-term goal for Tata Starbucks to eventually match the scale of Starbucks in China, which operates around 8,000 stores.

What to Watch Next

Going forward, the joint venture will focus on deepening store density across the 80 cities where it currently operates, aiming to achieve scale efficiencies by running more than five outlets per urban market. Market watchers will observe whether this approach continues to support positive same-store sales growth and improves profitability.

Frequently Asked Questions

How many Starbucks outlets currently operate in India?

Tata Starbucks operated 498 stores across approximately 80 cities at the conclusion of the June quarter.

Why was the store rollout moderated over the past two years?

The pace was reduced from around 100 stores annually to adapt to softer demand across discretionary spending and the quick-service restaurant segment, giving the joint venture time to adjust store size, capital costs, and pricing.

What is the ownership structure of Starbucks in India?

Starbucks operates in India through Tata Starbucks, an equal 50:50 joint venture between Tata Consumer Products Ltd and US-based Starbucks Corporation.

Source: Based on reporting by PTI via Business Standard.