For a while, it looked like Starbucks had lost its froth in India. After announcing an ambitious plan in early 2024 to more than double its store count—from 400 to 1,000 by FY28—the coffee giant ran into unexpected headwinds.
Sales slowed, same-store growth turned negative, and questions started swirling about whether India was losing its charm for the world’s most iconic café chain.
And then came the leadership shake-up.
CEO Laxman Narasimhan, who laid out the 1,000-store vision, exited just 15 months into the role. In his place, Starbucks brought in Brian Niccol, the turnaround star behind Chipotle’s revival. Investors approved. The stock jumped 21% after the announcement.
But under the radar, something else was brewing.
In its April 2025 update, Tata Consumer—the company’s India partner—confirmed that the 1,000-store target is back on track. After months of soft sales and operating cost pressures, demand has bounced back, and same-store growth, which had dipped into double-digit decline, has now recovered to nearly flat.
In other words, the machine is running again.
So, what changed?
During the slowdown, Starbucks pressed pause. Expansion into Tier 2 and 3 cities was slowed. Cost pressures—from inflation to rentals—forced the company to pull back, even as urban foot traffic remained strong.
But coffee demand never really went away. And now, with a recovery in sight, the company is restarting the engine with more discipline.
India is still one of Starbucks’ most under-penetrated markets. Coffee consumption here is just 30 cups per capita annually (vs 200+ globally). But the opportunity lies in urban millennials, rising disposable income, and a culture increasingly open to sipping ₹300 cappuccinos between Zoom calls.
And here’s why this matters
Globally, Starbucks is seeing signs of fatigue.
Despite a record $29.5 billion in annual revenue, same-store sales in the US are declining, and competition—from boutique cafés to fast-moving QSRs—is picking up. Growth markets are now front and centre in its playbook.
India could be next
This isn’t Starbucks’ first attempt at scale in an emerging market. Its China strategy followed a similar arc—big city launches, cultural acceptance, local adaptations, and aggressive rollout.
The result was over $3 billion in annual revenue from a single market that now rivals the US in strategic importance.
And while India’s coffee culture is still young, the foundation is being laid.
Urbanisation is accelerating. Disposable incomes are rising. Gen Z and millennial consumers are actively choosing cafés not just for coffee, but for lifestyle, ambience, and community. That’s where Starbucks has a natural edge—and its brand continues to carry serious weight in aspirational India.
At 400 stores today, Starbucks still lags far behind local QSR giants like Domino’s (with 1,800+) or McDonald’s (~700). But with Tata as a partner, an updated leadership team, and consumer demand warming up again, the runway looks long.
So while the past year looked like a stumble, the bigger story is intact. Starbucks isn’t giving up on India. In fact, it's betting on it more aggressively than ever.
And if it plays this round right, India might just become its next billion-dollar market.
