Licensee the Withers Group has posted the coffee chain’s first annual profit in Australia since it entered the market 23 years ago
Starbucks currently has 67 stores in Australia | Photo credit: Henry Co
Starbucks has achieved its first profit in Australia since entering the market in 2000, financial documents filed by licensee the Withers Group show.
According to a report filed with the Australian Securities and Investments Commission, Starbucks Australia posted a 35% rise in revenues for the financial year to 31 June 2023 of AU$157.3m. It made a profit of AU$3.15m during the period following losses of AU$5.5 million in 2022, and AU$13.3m in 2021.
The coffee chain opened eight new locations in 2023 and now operates a total of 67 stores across Australia. Turnover per store also improved from just under AU$2m in 2022 to $2.35m in 2023.
However, in a sign Starbucks’ recovery in Australia remains fragile, the PwC-audited report also outlined that the coffee chain is likely to require ‘significant financial assistance’ in the future.
Starbucks first entered the Australian market in 2000 but has struggled to gain traction in a market where consumer sentiment towards branded coffee chains remains lukewarm.
Amid mounting debts, in May 2014, Starbucks sold its underperforming 24-store Australian portfolio to the Withers Group, which also licenses convenience retailer 7-Eleven
in the country.
Further highlighting difficult trading conditions for international branded chains in artisan coffee-loving Australia, Danish operator Joe & The Juice exited the market in September 2023.
Nevertheless, Australia’s buoyant premium and specialty coffee market has proven attractive for international investors in recent years. In 2021, Japanese beverage giant Asahi acquired new Zealand-based Allpress Espresso
, which has a significant presence in Australia, to tap into the country’s AU$1bn ($780m) coffee market.
February 2022 saw UCC holdings acquire Suntory Coffee Australia
for $158.4m, with JDE Peet’s snapping up Australian specialty roaster Campos Coffee
the following June.