Difficult European trading curbs sales growth for Starbucks franchisee Alsea

Alsea operates 1,858 licensed Starbucks stores across 12 markets in Latin America and Europe | Photo credit: Alsea

Mexican quick-service hospitality group Alsea has posted mixed third quarter trading for its licenesed Starbucks business, with strong performance in Mexico and South America overshadowed by falling sales in Europe. 
 

Alsea, which operates 1,858 licensed Starbucks stores across 12 markets in Latin America and Europe, said sustained ‘macroeconomic challenges’ in France and the Benelux region had negatively impacted its third quarter Starbucks sales.  

The franchise group closed three Starbucks stores in the Netherlands in the three months ended 30 September 2024 – Alsea’s only Starbucks market to see a net decline in stores during the period.

Mexico City-based Alsea has reported difficult trading conditions in Europe for three consecutive quarters. In July 2024, the franchise group, which also operates licensed Starbucks stores in Spain and Portugal, highlighted that boycotts of American brands in western Europe were hindering sales as consumer concerns over Starbucks position on the Israel-Gaza conflict grew. 

Alsea’s total Starbucks like-for-like sales growth during the third quarter reached 2.6% – significantly lower than its fast-food and full-service restaurant segments in Europe and Latin America, which increased 16% and 6.3% respectively. 

Two percent like-for-like Starbucks sales growth in Mexico – Alsea’s largest market with 860 Starbucks stores – and 30% like-for-like growth in South America offset a 12.3% like-for-like sales decline for the licensed coffee chain in Europe. 
 

“With Starbucks, we continue to show signs of resilience. Despite challenges in specific markets such as France and Benelux, due to external factors, Starbucks remains a strong brand with a loyal customer base. In Mexico, despite facing a difficult comparison base, the brand remains a key driver of our business with consistent growth in both same-store sales and pipeline growth” said Armando Torrado, CEO, Alsea. 
 

In a press release, Torrado said Mexico offered the most potential for Starbucks to thrive among Latin America markets. Alsea opened 16 net new Starbucks stores in the country during the third quarter, which Torrado said were trading strongly.

The franchise group also sees significant opportunities in Colombia, where it currently operates 72 outlets. In August 2024, Alsea announced plans to invest $12m to open 30 new Starbucks stores in Colombia over the next three years. 
 

Elsewhere, Alsea opened eight net new Starbucks stores in France during the third quarter, alongside five in Spain, three in Chile, two in Portugal and single sites in Uruguay and Colombia. The franchisee also operates licensed Starbucks stores in Argentina and Paraguay. 

Alsea’s third quarter results come the day after Seattle-based Starbucks reported a 2% full-year like-for-like sales decline across its 87 markets – with total fourth quarter figures down 7% year-on-year.