Social media posts about the failure of Starbucks, a coffee chain to sustain in the Indian market is going viral. Users are sharing the post claiming that Starbucks is exiting from the country soon due to high cost, bad taste and mounting losses.
However, Fact Crescendo found the claim to be false. Tata, which has a joint venture with Starbucks in India has denied the claim and said that it is based on a baseless report.
What’s the claim?
A social media user wrote, “Starbucks set to exit due to bad taste. But Indians love this bad taste”
We found that the claim about Starbucks exiting from the Indian market started getting viral after a report by Philox, a digital news portal on 17 December 2024. The report reads, “Starbucks, the international coffeehouse chain, faces major headwinds in India given the high operating costs and low profitability with a deviation from Indian consumer preferences. The premium position and strong brand presence have also been hampered by some factors such as high rentals, imported ingredients, and price-conscious customers. Indian consumers usually prefer cheap, local substitutes such as chai, filter coffee, and local cafes, which suit their preferences and culture better.”
The report further stated that although there is no official statement yet but the above-mentioned factors have sparked rumors of the company’s possible exit from the Indian market.
Fact Check-
A Google Reverse Image Search led us to a clarification notice released by Tata Groups on the viral claim about Starbuck exiting from the India market. In the notice, the company stated that the information provided in an article claiming the exiting of the Starbucks from India is completely baseless.
According to NDTV report, Tata Consumer Products has dismissed rumours about Starbucks exiting India, calling them “baseless.” The clarification came after reports claimed Starbucks might shut down due to high costs and low profitability. In a letter to Indian stock exchanges, Tata confirmed that the news is false. Starbucks entered India in 2012 through a joint venture with Tata Consumer Products.
Apart from this, we found that in the annual report 2023-2024, Tata Starbucks Private Limited has expanded their store base to 421 by adding 95 new stores, a record high compared to 71 new stores opened in the previous fiscal year (FY23). The company entered 19 new cities, increasing its presence to a total of 61 cities. Despite challenges such as low demand in the quick-service restaurant (QSR) sector, the company managed to achieve a revenue growth of 12%.
Conclusion:
Fact Crescendo found the claim to be false. Tata has denied the report of Starbucks exiting the Indian market and called the rumors as baseless.
Title:Relax!!! Starbucks is not exiting India. Company said the rumor is baseless.
Written By: Siddharth SahuResult: False
