Starbucks India is set to resume its aggressive store expansion strategy following nearly two years of recalibrating its business model amid a broader slowdown in discretionary spending. According to Tata Consumer Products Managing Director and CEO Sunil D'Souza, the company used the last 18-24 months as an "opportunity to recalibrate" its entire business model -- from store size and capital expenditure per outlet to the pricing of beverages. As reported by PTI, D'Souza stated that things have "started to fall into place" as Tata Starbucks has now reported four successive quarters of same-store sales growth. "We had four successive quarters of same-store sales growth now, and we are seeing acceleration coming in. Now, we will again start to expand the number of stores aggressively," he said. D'Souza emphasized that operating more than five stores in a city brings efficiencies of scale, with delivery and kitchen operations running efficiently at this threshold.
TCPL operates a 50:50 joint venture with US-based Starbucks Corporation -- Tata Starbucks -- which currently operates around 500 Starbucks cafes in India. The company had earlier targeted opening around 100 Starbucks stores annually and sustained that pace for a few years, but moderated expansion over the last 18-24 months amid softer demand across discretionary consumption and quick-service restaurant segments. According to D'Souza, the renewed expansion will combine both new store additions and greater density in existing markets, with Starbucks having a presence in about 80 cities which he considers "a good number" to operate in. "I think 80 is a good number in terms of operating, but I think you will find density of stores in cities also going up significantly," he said. The JV reported 11 per cent revenue growth in the June quarter, opening four new stores including two Reserve outlets in Kolkata and New Delhi that strengthened its premium portfolio.
D'Souza emphasized that operating more than five stores in a city brings efficiencies of scale, with delivery and kitchen operations running efficiently at this threshold. The JV reported 11 per cent revenue growth in the June quarter, opening four new stores including two Reserve outlets in Kolkata and New Delhi that strengthened its premium portfolio. As reported by PTI, the JV was operating 498 Starbucks stores in India at the end of the June quarter. "The one critical thing you must remember is you get efficiencies when you have more than five stores per city, because then your delivery, your kitchen, etc, starts to run efficiently," he added.
According to TCPL's latest annual report, the JV posted a 7 per cent rise in revenue to ₹1,367 crore in FY26, while narrowing its net loss to ₹98.95 crore, aided by store expansion and positive same-store sales growth. TCPL Chairman N Chandrasekaran, addressing shareholders at the company's annual general meeting in June, articulated a longer-term ambition for Tata Starbucks to eventually catch up with Starbucks' scale in China, which has around 8,000 stores. D'Souza noted that "we do think Starbucks has a significantly longer runway in India," supporting the decision to recalibrate the business model during the challenging period.
