Starbucks India to Accelerate Store Expansion After Business Recalibration
Starbucks India is set to resume its aggressive store expansion strategy following nearly two years of recalibrating its business model, according to Sunil D'Souza, Managing Director and CEO of Tata Consumer Products. The announcement comes as the company, which operates in India through a joint venture with Tata Consumer Products Ltd (TCPL), reports improving sales performance despite a broader slowdown in discretionary spending.
D'Souza, in an interview with PTI, said the last 18-24 months were used as an "opportunity to recalibrate" the entire business model, covering store size, capital expenditure per outlet, and beverage pricing. He noted that things have "started to fall into place" as Tata Starbucks has now posted 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.
The recalibration period followed several years of rapid expansion. Tata Starbucks, a 50:50 joint venture between TCPL and US-based Starbucks Corporation, had earlier targeted opening around 100 stores annually and sustained that pace for a few years. However, expansion moderated over the last 18-24 months amid softer demand across discretionary consumption and quick-service restaurant segments.
Despite the slowdown, D'Souza expressed confidence in the brand's long-term prospects in India. "We also took the opportunity to recalibrate our entire business model, because we do think Starbucks has a significantly longer runway in India," he said.
The renewed expansion will combine new store additions with greater density in existing markets. Starbucks currently has a presence in about 80 cities, which D'Souza considers "a good number" to operate in, with only limited additions to the city count expected going forward.
"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, adding that operating more than five stores in a city brings efficiencies of scale.
Tata Starbucks currently operates around 500 Starbucks cafes in India. During the June quarter, the company opened four new stores, including two Reserve outlets in Kolkata and New Delhi, bringing the total to 498 stores at the end of the quarter. The company reported 11 per cent revenue growth in the June quarter.
For the fiscal year 2026, Tata Starbucks posted a 7 per cent rise in revenue to Rs 1,367 crore, while narrowing its net loss to Rs 98.95 crore.
The expansion plans are aligned with a longer-term ambition articulated by TCPL Chairman N Chandrasekaran at the company's annual general meeting, where he expressed the goal of Tata Starbucks eventually matching Starbucks' scale in China, which has around 8,000 stores.
Perspectives
Tata Consumer Products leadership: Sunil D'Souza views the recalibration as a strategic reset that positions Starbucks for accelerated growth, citing improved same-store sales and the potential for greater density in existing cities as key drivers of the renewed expansion.