NEW DELHI/LAHORE (Raja Arsalan Khan) – Tata Starbucks, a joint venture between Starbucks and Tata Consumer Products, said on Tuesday it plans to operate 1,000 cafes in India and double its workforce by 2028, amid fierce competition from local chains.
Since opening its first cafe in October 2012, Tata Starbucks' store count has grown to 390. It has opened 57 stores so far this fiscal year and had added 71 in the previous fiscal, the report adds.
This news shouldn’t be a surprise given that economic growth India has been witnessing since 1990s when New Delhi decided to replicate the economic reforms introduced by the then prime minister Nawaz Sharif.
Meanwhile, the process has only accelerated after Prime Minister Narendra Modi came into power in 2014. He is now widely expected to win a third term in the general elections to be held this year.
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What we have witnessed in Pakistan after that is a history, a known fact, as we tried to stop or even reverse the forward march and decided to roll back the elected political setups, which naturally sabotaged any possibility of economic development.
We had another opportunity in 2013, but the decision to punish the three-time elected prime minister yet again ensured that Pakistan is nowhere in the race and facing the worst economic crisis in its history.
Meanwhile, the post-2013 rollback process peaked on May 9 – an attempted coup during state institutions were targeted.
BUT WHY INDIA?
Besides the billionaires adding to their fortunes, the consistent economic growth means not only the middle class but also the upper middle class are expanding at a rapid rate. They are educated and mostly highly skilled, thus ready to embrace new lifestyle.
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Hence, they have more money to spend and dedicate time for leisure. Certainly, eating out with family or friends is an expression of individual freedom.
We do witness similar scenes in the big cities of Pakistan. However, the packed eateries serving affluent in our case are far fewer in numbers because of an overwhelming majority is hit hard by inflation and has been experiencing a worsening cost-of-living crisis.
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WHAT IS THE PLAN?
The coffee chain said it plans to enter Tier-2 and Tier-3 cities in India and increase the number of its drive-through, airport-based and 24-hour cafes. It aims to double its headcount to 8,600.
The US giant competes with Bengaluru-based Cafe Coffee Day and foreign entrant Barista, among others. It also faces growing competition from private equity-backed Third Wave and Blue Tokai which have opened about 150 stores between them in the last three years.
Tata Starbucks' 14 per cent on-year revenue growth in the three months to Sept 30, 2023, was the slowest since the March quarter of 2020 when it had to close all its stores due to the COVID-19 pandemic.
Among the first foreign coffee brands to enter India, Starbucks has been revamping its strategy in India since last year, launching a six-ounce drink starting at $2.24 and milkshakes in an attempt to woo customers in the tea-loving country.