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Starbucks India is preparing to accelerate store additions after spending the past 18–24 months reassessing its business model amid weaker discretionary consumption. Tata Consumer Products MD and CEO Sunil D’Souza said the company has recorded four consecutive quarters of same-store sales growth, indicating improving performance. Tata Starbucks, the 50:50 joint venture between Tata Consumer Products and Starbucks Corporation, operated 498 stores across about 80 Indian cities at the end of the June quarter. The renewed strategy will focus on adding outlets and increasing store density in existing markets, where the company sees operating efficiencies once a city has more than five stores. The business is targeting longer-term expansion in India.
Tata Starbucks is preparing to step up its store expansion in India after using the past 18–24 months to reassess its operating model amid softer discretionary consumption. Tata Consumer Products Managing Director and CEO Sunil D’Souza said the company was now seeing improving performance, with four consecutive quarters of same-store sales growth supporting a renewed expansion strategy.
Tata Starbucks is operated through a 50:50 joint venture between Tata Consumer Products Ltd (TCPL) and Starbucks Corporation of the US. The business had 498 Starbucks outlets across India at the end of the June quarter, with a presence in around 80 cities.
D’Souza said the company had used the recent period of moderated expansion to examine several parts of the business, including the size of its stores, capital expenditure required for each outlet and beverage pricing. The exercise was undertaken as demand across discretionary consumption and the quick-service restaurant segment remained relatively subdued.
The company had previously targeted adding roughly 100 stores a year and maintained that pace for several years. Expansion was subsequently moderated as the business reviewed the economics of individual outlets and assessed how the brand could build a sustainable presence in the Indian market.
The next phase will combine opening new locations with increasing the concentration of stores in cities where Starbucks already operates. Rather than substantially increasing the number of cities covered, the company expects a greater share of its growth to come from deeper penetration of existing markets.
D’Souza said around 80 cities represented a suitable operating footprint for the business at present, although there could be some additions over time. The company sees scope to increase the number of outlets within these markets, particularly because a larger store network can improve operating efficiencies.
The company has identified five stores in a city as an important scale threshold. Once the network reaches that level, delivery operations and kitchen infrastructure can be used more efficiently, improving the economics of running multiple outlets within the same market.
The renewed expansion comes as Tata Starbucks reports stronger recent operating performance. During the June quarter, the joint venture recorded 11% revenue growth and added four stores. Two of the new outlets were Starbucks Reserve stores in Kolkata and New Delhi, expanding its premium-format presence.
TCPL's latest annual report showed that Tata Starbucks recorded revenue of INR 1,367 crore in FY26, representing a 7% increase from the previous year. Its net loss narrowed to INR 98.95 crore during the year, supported by store additions and positive same-store sales growth.
The business is also operating against a longer-term growth ambition. TCPL Chairman N Chandrasekaran said at the company's annual general meeting in June that Tata Starbucks could eventually aspire to reach a scale comparable with Starbucks' presence in China, where the US coffee chain operates around 8,000 stores.
The comparison highlights the size of the potential market the Indian joint venture is seeking to address, although its immediate strategy remains focused on strengthening its existing network.
With same-store sales improving and the business model having undergone a detailed review, Tata Starbucks is now moving towards a higher pace of store additions while concentrating on operational density in markets where it already has an established presence.
Source- PTI
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