Why Starbucks Failed in Australia

Although Starbucks is the leader of the coffee market in many countries of the world, at this point Australia is It has proven to this brand that this job is not as easy as expected. This failure is quite surprising and remarkable for Starbucks, which enjoys being indispensable in every region it steps into.

So, at this point, what makes Australia distinctive and Why doesn’t Starbucks, which breaks sales records all over the world, attract attention on this continent?

In fact, Australia already had an established coffee culture.

II. After World War II, Greek and Italian immigrants brought espresso to Australia and these people began to bring the coffee drinking culture into their daily lives. Over time, next to espresso; flat white, ristretto, Australian macchiato, piccolo and affogato They started to turn to coffees such as coffees and consumed them mainly.

Again, over time, cafes became places for socialization and Australians friendly, small coffee shops with close relationships with local baristas started to prefer it.

But Starbucks, diving headfirst into Australia’s coffee market, didn’t take all of this into account.

This coffee brand, which opened its first store in Australia in Sydney in July 2000, quickly spread to all parts of the continent. By 2008, in Australia, There were 87 Starbucks stores.

The biggest mistake of this company, which has become very popular and has broken sales records over the years, is that the business model they have adopted is If he hadn’t thought that he wouldn’t be able to adapt in a different region.

For some reason, Starbucks was sure that it would be highly popular with Australians. Considering that McDonald’s expanded into India and started with a special menu for Indian consumers, this situation is It was too ambitious for Starbucks, which insisted on not changing its menu.

Instead of integrating into the Australian market step by step, Starbucks quickly opened multiple locations.

However, this situation; It has not given the Australian consumer the opportunity to develop an appetite for the Starbucks brand. In fact, Australians, who have encountered too many Starbucks in a short time, have not experienced the inaccessibility of this brand. On the contrary, this coffee company It has become a very easily accessible place for them.

In this case, Starbucks, It suffered a loss of approximately 105 million dollars in its first 7 years.. By 2007, Starbucks branches in Australia had to take out a large loan from the USA. The branches in this region were hanging by a thread.

This coffee brand, which found the solution by closing its 61 stores in 2008, had a very difficult year for its business. The branches closed in Australia also affected those in America, and 600 branches were closed in this region. Of course, such a decline It was a huge embarrassment for Starbucks.

As predicted, the Australian consumer; He didn’t care much about Starbucks’ massive departure from the coffee market.

Because Starbucks emerged with the American style coffee culture, where coffee is essentially a commodity or product, and no matter which part of the world it goes to, It continued on its own line without making any changes to its menu.

To Australians, Starbucks’ menu was pretty simple. Creamy, sugary, so to speak, fancy drinks were not suitable for them. Australians, whose coffee culture was shaped many years ago, enjoyed espresso-style coffees.

Moreover, in addition to its fancy coffees, Starbucks even offers more plain coffee varieties, It was selling at a much higher price than other coffee shops in Australia. This being the case, people preferred to drink their coffee by paying less money than the places they were used to.

Moreover, the situation is completely different in Italy. The coffee culture of Italians is just like that of Australians and they too He is after much cheaper coffee.

But Starbucks hasn’t given up in Australia yet.

Despite the branches closing in 2008, the company started to reopen its stores after a short break. Currently Starbucks; In many parts of Australia such as Melbourne, Sydney and the Gold Coast It has 39 different branches. In Turkey, this number is 663 as of May 2023.

“So how do these stores work?” If you say, the answer is quite simple: Tourists. Starbucks, which is now trying to appeal to visitors to the region rather than the people of Australia, continues to follow this logic in Australia.