Tata Starbucks cuts short-term growth forecast as inflation hits sales

The interior of a Starbucks store in Ludhiana, India | Photo credit: Starbucks

Tata Starbucks has indicated it will reign in outlet growth over the next 12 months as price-conscious consumers limit out-of-home coffee consumption.  
 

Launched in 2012 as a 50:50 joint venture between Tata Consumer Products Limited and US coffee giant Starbucks, Tata Starbucks is the largest branded coffee chain in India with 457 outlets as of the second quarter ended 30 September 2024. 

In January 2024, Tata Starbucks outlined an ambitious goal to reach 1,000 stores by 2028 – a target which would require the coffee chain to open a new store every three days. 

However, Tata Consumer CEO Sunil D’Souza told Reuters that the coffee chain will delay plans for some new stores next year amid sustained high inflation that has squeezed middle earner spending. 

“We will calibrate for the short-term – maybe instead of opening 100, we will open 80 now, and next year we will open 120 instead of 100,” he said.  
 

D’Souza reaffirmed his commitment to reaching 1,000 stores by 2028. However, he said the coffee chain will need to further diversify its store portfolio amid a shortfall of ‘good quality real estate with traffic’ in the country. Tata Starbucks has previously outlined plans to open more smaller-format, drive-thru, 24-hour and airport stores.