Starbucks Australia posts AU$5.8m loss amid expansion drive and weaker consumer spend

Starbucks expanded to the west coast of Australia for the first time in October 2024 | Photo credit: Athar Khan

Starbucks Australia’s bid to reinvigorate growth has hit turbulence after the licensed business posted a AU$5.8m ($3.7m) loss for the 12 months ended 30 June 2024. 
 

Financial documents filed by parent company The Withers Group stated there had been an “industry wide decline in customer traffic” from the end of 2023. In a statement to The Guardian Australia, Starbucks Australia Chairman Michael Smith said the coffee chain had faced “major macro environment challenges, due to cautious consumer spending amid rising cost-of-living pressures”. 

An outlet growth drive has also generated higher costs for the Seattle-based coffee chain. Since turning its first annual profit in 2023, Starbucks Australia has opened 11 net new stores over the last 12 months to reach 78 outlets, including expansion to the west coast for the first time in October 2024.
 

Starbucks entered Australia in 2000 with an outlet in Sydney and scaled to 80 stores before closing two-thirds of its sites in 2008 amid significant losses. However, the coffee chain has slowly rebuilt its store network since being acquired by former 7-Eleven owner The Withers Group in 2014, turning a AU$3.15m ($2m) annual profit in 2023. 
 

While it is striving for higher profits, Starbucks Australia’s primary focus remains outlet expansion, Smith added. He also said Starbucks Australia had “reinforced its commitment” to the local market this year by bolstering its management team. In October 2024, Starbucks Australia appointed Non-Executive Director Braeden Lord as its new CEO, before adding hospitality entrepreneur James Sinclair to its Board of Directors two months later.
 

Starbucks Australia currently has a further 40 sites in development across the country – including a dozen drive-thru stores in Perth.