When selling coffee is not enough

by Maurizio Corda

On 3rd August, American giant Starbucks closed 61 of its 85 shops in Australia. After over a month and hundreds of jobs lost, I and many other coffee lovers still think about what went wrong and why did Starbucks fail to break the Australian market.

Being one of the biggest coffee retailer chains in the world, I did not really expect Starbucks to report profits falling down 28% from the previous year. Well that is what happened in April this year, when the coffee chain published the new results of an underperforming year.

As an immediate consequence, and since the biggest economic downturn came from its domestic market, Starbucks announced the closure of 100 national shops. A simple financial adjustment at first glance, it preceded a further mass closure of 500 shops around the country.

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