Licensee Berjaya Food has posted a fifth consecutive quarterly loss but expects sales to improve over the next six months as consumer boycotts subside
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A Starbucks Signing Store in Permas City, Johor | Photo credit: Berjaya Food
Consumer boycotts strongly contributed to a fifth consecutive quarter of losses for Starbucks in Malaysia, franchisee Berjaya Food has reported.
Posting its results for the second quarter ended 31 December 2024, the Selangor-based restaurant group, which operates 408 Starbucks stores in Malaysia alongside licensed Paris Baguette and Kenny Rogers Roasters outlets, reported a pre-tax loss of RM 35.3m ($8m) after group revenues fell 32% year-on-year to RM 123.1m ($27.9m) – a 1% decline on the previous quarter.
In its Bursa Malaysia filing, Berjaya Food said higher losses and lower revenues stemmed from ‘the prolonged impact of the ongoing sentiment related to the Middle East conflict’.
Starbucks is among several Western brands, including McDonald’s, KFC and Pizza Hut, that have seen sales slump in Malaysia due to consumer boycotts over their perceived stance on the Israel-Gaza conflict.
However, amid signs that consumer sentiment is recovering, Berjaya Food said that it remains well positioned for stronger financial results in the second half of its fiscal year. In January 2024, Berjaya Group Founder Vincent Tan told reporters that boycotts were tapering off as consumers begin to realise that “Starbucks Malaysia is not hurting anyone”.
Nonetheless, the restaurant group is seeking to further support the recovery of its Starbucks franchise by diversifying its café business and leveraging opportunities domestically and internationally.
In August 2024, Berjaya Food secured franchising rights to operate Starbucks in Denmark, Finland and Iceland – its first licensing deal outside of Southeast Asia. Additionally, the group is seeking to build upon it 13-store Paris Baguette footprint in Malaysia and the Philippines with a master franchise agreement to bring the SPC Group-owned bakery-café chain to Thailand in the second half of 2025.