Food - ReTale News

A decade after launching its first store in India, Starbucks’ yearly sales surpassed Rs 1000 crore.

Retale
26/04/2023
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Tata Starbucks, a joint venture between the Tata Group and Starbucks, crossed Rs 1000 crore sales mark after starting operations in the country a decade ago. For fiscal 2022-23, the Indian unit of the world’s biggest coffee retailer expanded sales by 71% to Rs 1087 crore, paced by the addition of new outlets as demand for quality beverages increased in Indian metro cities. In FY22, it had sales of Rs636 crore. Tata Consumer, in its earnings presentation said it ran a pilot in 2022 across four cities in India to drive familiarity among consumer segments, create more occasions for consumers to visit Starbucks and grow the consideration set for different types of consumers. “Tata Starbucks is looking to rapidly expand its presence in the coming years. To achieve this, we are looking to enhance its relevance for more segments of consumers,” it added. “The pilot stores demonstrated improved operating metrics. As such, these workstreams will be rolled out nationally in 2023.” Last year, Starbucks, on a pilot basis, launched masala chai and filter coffee in India and also revamped its menu to attract consumers with Indianised and more affordable options The menu now also included street-style freshly assembled sandwiches, milkshakes, bite-sized snacks and a smaller beverage cup. Starbucks, which started its India operations in October 2012, also recorded the fastest store expansion last fiscal when it added 71 stores, taking the overall door count to 333. Starbucks’ positioning in India is premium compared to its rivals Cafe Coffee Day and McCafe, which have significantly lower prices. However, its two global rivals – Canadian coffee chain Tim Hortons and US-based food and organic coffee chain Pret a Manger are now already present in India. Analysts feel it will be competition to Starbucks in the long term and high pricing of the US coffee retailer could come under risk.

Business News Food

Quick Service Restaurants are rapidly growing.

Retale
05/04/2023
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Most quick service restaurant chains in India are in a hiring and expansion mode in anticipation of strong consumer demand from metros as well as non-metro cities, experts at recruitment and search firms and private equity funds told ReTale.This notwithstanding some of these chains reporting subdued growth in their latest quarterly results and a global slowdown impacting multinational chains such as McDonald’s that is reportedly looking at a layoff exercise and probably to shut offices in the US. “We are not seeing a slowdown in the quick services restaurant space,” Radhika Vivek, senior partner, consumer, retail and services practice at executive search firm Transearch International, told ReTale. “In the last one year, we have been working with three big QSR chains and all are on a hiring and expansion spree.” Many indigenous and regional QSR chains are expanding in tier-2 and tier-3 cities like Salem and Erode in Tamil Nadu; Kolhapur, Satara, and Aurangabad in Maharashtra; and Belgaum, Hubli, Chitradurga and Davangere in Karnataka, she said. Experts said many Indian consumers are discovering the QSR space and getting hooked onto getting food delivered as their disposable incomes rise. Also, many fast-food chains have affordable pricing, which helps them attract first timers, they said. Nikita Garg, partner at talent search firm Hunt Partners, said QSR companies are not pausing on their growth plans. Unlike tech startups and some other sectors, QSR chains in the country are not facing much fund crunch. A senior official at a leading international private equity fund that has invested in three QSR chains in India told ReTale that it is keen on investing in more QSR chains as the “India growth story is quite strong”. “We are exploring more such companies in India,” the person said on condition of anonymity. “In contrast to the US where a majority of the QSR market is organised, in India the organised QSR is only a fraction while the unorganised segment dominates. Here lies the growth opportunity which a fund like ours wants to invest in (organised QSR chains).” Even McDonald’s seems to be expanding and hiring in the country. According to earlier media reports, McDonald’s India (north and east) said it is hiring 5,000 employees to meet its requirement of doubling its outlets to over 300 over the next three years. “We have over 5,000 employees and as we expand, the number of employees will double in three years,” McDonald’s India (north and east) managing director Rajeev Ranjan was quoted by the report. Ashutosh Khanna, partner, consumer markets practice, South Asia, at executive search firm Heidrick & Struggles, said, “A majority of QSR chains are doing extremely well.” He said there is no change in demand for talent in the QSR space, while the nature of talent in demand has shifted from “ready fit” to “near fit”.