Starbucks to Open 144 Outlets by This Year

Tata Starbucks, the joint venture between Starbucks global and the Tata Group, is aiming to achieve break even by FY20.

“The break even is expected for FY 19-20. India, while it presents a tremendous amount of opportunity there are also challenges, “said Navin Gurnaney, CEO, Tata Starbucks.

As per analysts’ reports, the café chain was expected to break even in FY19 but Gurnaney clarified that it will only happen in the next fiscal.

He added that the occupancy costs are not that easy in the country but was proud of what the company could accomplish since it began its journey in 2012.

“We are very proud of having broken even (target of FY19-20) in a very short period of time,” he said adding that international players like Domino’s and McDonald’s had to wait for a decade to get a break even.

 He also mentioned that as comparison to the other Asian markets the store profitability is ahead at Tata Starbucks.

The company reportedly had posted a net loss of Rs 30.5 crore in FY18 in India.

Tata Global Beverages in its annual report for FY 17-18 had said Tata Starbucks improved sales by 28 percent with robust in-store performance and new stores added during the year. It had posted Rs 272 crore in sales during FY17. It had added that for the first time since inception, the company recorded a positive Ebitda.

Currently, the coffee chain is operating 136 stores in the country and will finish this year at 144 stores, with additional outlets in the future.

Gurnaney, who took charge last month after replacing Sumitro Ghosh said that the growth is always on their mind.  “We have seen that in other Asia Pacific markets, once the market approaches the USD 2000 per capita income point, then it is almost a recognized point of inflection. That’s where the consumption really takes off. It’s a big pie and there is room for everybody to grow,” he added.