Starbucks Australia Posts $5.8 Million Loss As Consumers Cut Costs With Coffee At Home – CoffeeTalk

Starbucks’ Australian business has reported a $5.8m loss in the last financial year, a significant blow to its turnaround plans. The company, owned and operated under license by the billionaire Withers family, has faced major macro environment challenges due to cautious consumer spending amid rising cost-of-living pressures. However, it has remained steadfast in its goal to see the Starbucks brand revitalised, with a firm focus on a stronger customer experience, store design, and innovative product development.

The Withers family, which bought Starbucks’ Australian business in 2014, are the former owners of the 7-Eleven network in Australia. Starbucks’ financial documents refer to an “industry wide decline in customer traffic” starting late last year. While the chain has long faced questions over whether its flavoured menu could resonate with Australian coffee connoisseurs, it posted its first surplus in 2023, in what it hoped signalled a change in fortune for the business.

The positive result, the first since Starbucks opened in Australia in 2000, was credited to the chain’s growing appeal among younger generations enticed by its cold drink range, which includes iced coffees and cold brews. While customer numbers are down across the cafe sector, overall coffee demand remains strong, with consumers looking for cheaper alternatives.

The chair of Starbucks’ Australian business, Michael Smith, said while the company was striving for higher profits, its primary focus was on expansion. Starbucks is seeking to have more than 100 Australian stores in operation next year and has been expanding its drive-through network.

The headwinds facing the Australian business are also evident overseas, with the Seattle-based company reporting falling sales, revenue, and profit amid weak demand in the US and the important Chinese market. The company’s new chief executive, Brian Niccol, has said Starbucks will simplify its “overly complex menu” and change its pricing strategy so that customers feel “Starbucks is worth it”.

Read More @ The Guardian