Tata Consumer has responded to reports claiming that Starbucks is exiting India due to high costs and mounting losses. This comes after it was reported that the coffee chain is delaying plans to open some new Starbucks stores until later in its existing schedule.

According to a Reuters report, Tata Consumer has termed as “baseless” the reports of Starbucks exiting India.

Meanwhile, shares of Tata Consumer Products Ltd were trading 0.69 percent higher at Rs 915.60 today. At this mentioned price, the stock is down 14.16 percent in the 2024 calendar year to date.

STARBUCKS PRESSURE POINTS

According to a separate report earlier this week in Reuters, fewer customers are coming into coffee shops, forcing Starbucks to recalibrate its plan to open more stores.

Tata Consumer CEO Sunil D’Souza told the news agency last week: “We will calibrate in the short term; maybe instead of opening 100, now we will open 80 and the year come we will open 120 instead of 100”. However, Starbucks is still focused on its goal of opening 1,000 stores by 2028.

“In India, good quality real estate with traffic … is a challenge,” he said, contrasting it with the “massive mall development” in China. Despite the challenges, Tata Consumer’s CEO remains bullish on the long-term prospects of his coffee investment.

In the last fiscal year, Starbucks reported a 12% increase in sales to $143.6 million, but its net loss widened. The company’s revenue for the first half of this year showed only a slight increase.

According to data from business information provider Tofler, Starbucks’ revenue in the last financial year had more than doubled compared to four years ago.