Plans to sell a 30% stake in the 2,000-store Starbucks franchise have reportedly been put on hold amid sustained customer boycotts of the coffee chain in the Middle East
The exterior of a Starbucks store in Dubai, UAE | Photo credit: Tony Sebastian
A minority stake sale of Starbucks’ Middle East and North Africa (MENA) franchise has reportedly been put on hold.
Reports that Kuwait-based Alshaya Group, Starbucks’ master franchise partner in the Middle East and North Africa (MENA) since 1999, was seeking to sell a minority stake in its 2,000-store Starbucks franchise first circulated in February 2024.
US private equity firm Apollo Global Management Inc and Saudi Arabia’s Public Investment Fund (PIF) were both highlighted at the time as parties of interest, with a 30% stake believed to be on offer.
Quoting unnamed sources with knowledge of the process, a Reuters report stated Alshaya Group is in no rush to sell the stake and that talks were likely to be on hold until next year.
The reported minority stake sale comes as US-based Starbucks faces sustained customer boycotts in the MENA region over ‘misconceptions’ concerning its position on the Gaza conflict.
Alongside negatively impacting footfall and sales across its 13 MENA markets, boycotts have also significantly impacted sales in parts of East Asia, Europe and the US, with license partners Berjaya Food and Alsea both highlighting protests and poor consumer sentiment towards the chain as key factors behind falling revenues this year.
In December 2023, Starbucks published a new resource page on its website, Starbucks for the Record, providing responses and denials to ‘inaccurate information’ concerning its stance on the conflict. The Seattle-based coffee chain also partnered with Alshaya Group in April 2024 to donate $3m to World Central Kitchen to provide more than one million meals to families in Gaza.
Founded in 1890, Alshaya Group currently operates licensed Starbucks stores in Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and the UAE – as well as Kazakhstan and Azerbaijan.
In April 2024, the franchise group cut more than 2,000 jobs – approximately 4% of its total 50,000 workforce – in the wake of customer boycotts.
Alshaya Group’s other licensed food and beverage brands include Chipotle, Bouchon Bakery, Dean & Deluca, Le Pain Quotidien and Pizza Express.