Tata Starbucks records first positive earnings with 28% increase in sales

INDIA – Tata Starbucks, a joint venture between the Tata Group and the American coffeehouse chain Starbucks has posted its first positive EBITDA after sales increased by 28%, almost doubling in the financial year 2018.

According to ET Retail, improved sales were attributed to strong performance in in-store and new stores that were added this year.

In the previous financial year 2016/17, the company which operates Starbucks outlets in India recorded sales of up to US$39.67m while revenue in the same year was US$50.75 million.

“For the first time since inception, the company recorded a positive EBITDA,” the company said in its annual report.

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“The growth is nearly double compared to a year ago period when it mostly focussed on profitability and halted aggressive expansion, however, it added nearly 25 stores last financial year.

The JV narrowed net loss marginally to US$4.37m during the year to March 2018 compared to US$4.66m a year ago.

“Various in-store initiatives and the loyalty programme coupled with the ambience provided in stores resulted in improved existing store performance.”

Its close rival Coffee Day Enterprises, which runs the country’s top coffee house chain, Cafe Coffee Day reported retail revenue of US$231.9m from 1,722 outlets.

Jubilant FoodWorks, which runs Dunkin’ Donuts and Domino’s Pizza in India, clocked US$379,312 per store.

Starbucks which entered India in 2012 has recorded the fastest store expansion in the company’s 45-year history, this driven by increasing margins.

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Expanded partnership

In June 2016, Starbucks and Tata Group expanded their partnership by committing to developing the Tata-Starbucks brand and building a different kind of company in India.

Starbucks launched a single-origin coffee from India in the U.S, a product from the Tata Group with plans to increase its coffee roasting capacity for supplying its stores in India.

The partnership was also expanded when Starbucks launched the Himalayan Mineral Water, bottled by Tata Global Beverages, beyond Starbucks stores in India to Singapore.

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