India's Tata faces pressure in Starbucks joint venture as consumers cut back

Tata Consumer CEO adjusts Starbucks store opening plans, maintains goal of 1,000 stores by 2028.

India's Tata Consumer Products will push back plans for some new Starbucks store openings until later in its existing schedule as fewer customers are walking into its cafes in the world's most populous country, its top boss said on Monday (December 16, 2024).

"We will calibrate for the short term — maybe instead of opening 100, we will open 80 now, and next year we will open 120 instead of 100," Tata Consumer CEO Sunil D'Souza told Reuters, adding that Tata Starbucks is still focused on reaching its 2028 goal to operate 1,000 stores by 2028.

City dwellers in India are cutting spending on everything from cookies and coffee to fast food as persistently high inflation squeezes middle class budgets, with wages failing to keep pace.

Tata Starbucks, a joint venture between U.S. coffee brand Starbucks and the Indian conglomerate, operates the largest cafe chain in the country with more than 450 outlets.

Its store numbers had more than doubled from four years ago by the last financial year, but Mr. D'Souza said a lack of quality locations is a roadblock.

"In India, good quality real estate with traffic... is a challenge," he said, contrasting that to the "massive development of malls" in China, Starbucks' second largest market and the second most populous country after India.

Tata Starbucks has beefed up its dedicated team to plan for store openings, keeping an eye out for upcoming real estate development and shortlisting locations ahead of time.