No, Starbucks is not going anywhere. Coffee chain says ‘fully committed to Indian market’

Tata Consumer Products has denied a report suggesting American coffee chain Starbucks could exit India soon due to rising losses and high operating costs. In letters to three major Indian stock exchanges, Tata Consumer Products called the report “baseless.”

The coffee chain itself reiterated that it is not exiting the Indian market. “Starbucks is fully committed to the Indian market. Any statements suggesting otherwise are false. TATA Starbucks currently operates more than 470 stores in 76 cities across India, which continues to be a key growth market for Starbucks globally,” Starbucks said.

The “baseless” report

On December 19, a Rajasthan-based media organisation, called The Philox, published a report suggesting Starbucks could soon leave India. Published with the headline “Starbucks to Exit India Due to High Costs, Bad Taste, and Mounting Losses,” the report speculated that the hugely popular coffeehouse chain could shut shop in India due to price-conscious Indian consumers preferring cheaper local substitutes.

Starbucks had entered India in 2012 through a partnership with Tata Consumer Products. The Philox report did not quote any Tata official and acknowledged that “no official statement has been made” even as it claimed that Starbucks beverages are perceived as “overpriced and shallow” in India.

“Despite its ambitious plans, Starbucks has struggled to turn significant profits in the Indian market,” the report said.

It was published days after Starbucks India confirmed that it would delay the planned launch of new store openings.

Tata Starbucks Private Limited, the joint venture of Tata Consumer Products Limited and American coffee chain Starbucks, saw its losses widen to ₹81 crore and revenue from operations grow 12% in fiscal year 2024, according to TCPL's annual report released in May this year.

Tata Consumer’s clarification

However, TCPL denied the possibility of exiting India in a letter titled “Clarification on News Article Titled - Starbucks to Exit India Due to High Costs, Bad Taste, and Mounting Losses.”

“The Company would like to state that the information in the said article is Baseless,” Tata Consumer Products said in a letter addressed to the National Stock Exchange of India, Bombay Stock Exchange, and Calcutta Stock Exchange.

“Reports of Starbucks looking to exit India (are) completely false and baseless. Tata’s relationship with Starbucks stands strong with shared values and commitment to India,” the company further told CNBC-TV18.

“Starbucks is fully committed to the Indian market. Any statements suggesting otherwise are false. TATA Starbucks currently operates more than 470 stores in 76 cities across India, which continues to be a key growth market for Starbucks globally,” Starbucks reiterated in a statement.

However, Tata Consumer CEO Sunil D'Souza told Reuters on Monday that it will delay plans for some new Starbucks store openings until as fewer customers are walking into its cafes in India.

Google Trends

Starbucks was a top keyword on Google Search in India on Thursday, drawing significant attention from users across the country. Related keywords that people used on Google include "Starbucks to exit India" and "Starbucks T Nagar".