Home / Industry / Retail /  Starbucks recovered much faster than last year, will continue to expand: CEO

American coffee chain Starbucks Coffee Co., which operates in India through a joint venture with Tata Consumer Products Ltd, seeks to expand its footprint in the country despite the covid-related disruptions impacting the eating-out industry.

The company, which operates over 220 stores in India opened 39 stores and entered seven new cities in 2020, said Sushant Dash, who took charge as the chief executive of Tata Starbucks Pvt. Ltd on 1 May.

India continues to be one of the fastest growing markets for the Starbucks brand, Dash said. “In fact, last year we have been on track, we expanded. While I would say that our expansion has been aggressive, it is also well thought."

“(Last year) we opened the highest number of stores. So, I would say we remain bullish, and we will continue to be mindful as to how the market grows, what the future holds, and will continue to expand."

The brand expanded to Lucknow, Amritsar, Kochi, Ludhiana, Bhopal, Indore, and Kanpur. It also opened its first Drive Thru store in Zirakpur, Chandigarh, last October.

It has also seen an increase in home deliveries even after the easing of mobility restrictions. However, its revenue fell 33% year-on-year in FY21, due to the covid-led hit on out-of-home consumption, but it still remained Ebitda (earnings before interest, taxes, depreciation, and amortization) positive, Tata Consumer Products said in its FY21 annual report.

It reduced costs through rental renegotiations and overhead optimization. In FY21, it had experimented with new store formats, such as Drive Thru and small engine stores, to capitalize on the takeaway and delivery opportunities.

The state-wise lockdowns impacted business in the June quarter as stores were closed across most parts of the country for five to six weeks , said Dash. “Restrictions have been lifted in a phased manner. Now, in most parts dine-ins have been allowed to around 50%. So, it has had an impact on overall numbers," he added.

However, close to 85% of its stores are now open, while the rest remain shut due to local restrictions, where malls are not operational, and IT Parks are not fully open.

While outlets are working with 50% seating capacity, the recovery reported by the chain has been quicker compared to last year. “We have recovered actually much faster than last year. The numbers are significantly stronger than the previous lockdown. There has been faster week-on-week increase, as our stores reopened for dine-in and takeaways."

Starbucks scaled up its digital innovation with delivery as the “prime focus".

“We have used WhatsApp and Dotpe’s QR scanning. We do deliveries through the aggregators. We have done innovation in terms of packaging to ensure there is no spillage and the beverage reaches at the right temperature," he added.

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