Tata Starbucks, the coffee chain joint venture (JV), posted a growth of 21 percent for the financial year 2019-20, helped by increase in sales and stores, according to the annual report of Tata Consumer Products Ltd(TCPL). Though business achieved high store growth, Tata Starbucks’ profitability was adversely impacted” in 2019-20 by reversal of deferred tax assets due to tax rate changes, implementation of the new accounting standards for leases and also to some extent by the impact of lockdown.
During the financial year 2020-21, TCPL invested Rs 53 crore in the JV, taking the total investment to Rs 288.80 crore. Tata Starbucks, a 50:50 JV between Tata group firm TCPL and Starbucks Corporation, has added 39 new stores opened during the year, taking the total count to 185 stores in 11 cities.
TPCL in its annual report said, “Our joint venture with Starbucks Corporation reflected a growth of 21 percent for the year due to sales growth in stores coupled with store expansion.” The report added that the business achieved high store growth across formats, airports, highways and smaller footprint stores.
Though the company was “impacted a bit” in the fourth quarter of 2019-20 due to COVID-19 and subsequent disruptions in the market, as it had to shut all stores for over two weeks in March but now has opened some stores and expects the situation to normalise over the next few months.
The report said, “The business was impacted in the last quarter due to COVID-19, and a number of store openings that were scheduled in March 2020 had to be postponed. By the end of May 2020, we had around 60 stores opened for takeaway and deliveries in 10 out of the 11 cities we are present in. Some of our stores have now opened for delivery and takeaways and will progressively normalise.”
