| India

Tata Starbucks sees slower third quarter sales

The joint venture business has seen sales growth decelerate from 42% in the third quarter of last year to 7% this year amid weaker consumer spend

Tata Starbucks has an ambitious goal to scale its operations in India to 1,000 stores by 2028 | Photo credit: Henry Co


Tata Starbucks continued to see sales growth slow in its third quarter as it prepares for a period of rapid outlet expansion. 

Reporting on the three months ended 31 December 2023, Tata Starbucks achieved 7% year-on-year sales growth – compared to 21% and 14% in its first and second quarters, and 42% in the corresponding period last year. 

Slower sales for Tata Starbucks echo a fall in profits for Costa Coffee franchisee Devyani International (DIL), which highlighted a challenging macro-economic environment’ and subdued consumers spending across its fast-casual portfolio, which also includes hundreds KFC and Pizza hut stores.   

Tata Starbucks opened 22 net new stores in the quarter to reach 392 Starbucks stores across 55 cities, bringing the total number of new outlets to 59 for the first nine months of its fiscal year, which ends on 31 March 2024. 

Tata Starbucks was formed in 2012 as a joint venture between US coffee chain Starbucks and Indian tea and coffee group Tata Consumer Products. The first store of the partnership opened in Mumbai in October 2012.  

In January 2024, Tata Starbucks announced an ambitious goal to scale its operations in India to 1,000 stores by 2028, driven by the expansion of its drive-thru, airport and 24-hour store network. Starbucks will need to open around one new store every three days to achieve the target.  

Read related content: All rise for India’s fast-growing coffee industry 

Tata Consumer Products’ total third quarter revenue grew 9% year-on-year to Rs 3,804 Cr ($458m) with total coffee sales rising 17% year-on-year. 

The group’s key beverage brands include Tata Tea, Tetley, Eight O’Clock Coffee, Tata Coffee Grand, Himalayan Natural Mineral Water, Tata Copper+ and Tata Gluco+.  

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