Starbucks Sells 24 Stores in Australia to 7-Eleven Owner, The Withers Group

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By Vittorio Hernandez | May 28, 2014 8:32 AM EST

Coffee giant Starbucks sold its 24 stores in Australia to The Withers Group, which owns the 7-Eleven franchise in the country covering 600 outlets. Prior to the sale, Starbucks, which opened its first store in Sydney in 2000, was wholly owned by Starbucks in the U.S., based in Seattle.


The Starbucks logo hangs on a window inside a newly designed Starbucks coffee shop. (Reuters)

With the sale, Starbucks entered into a licensing agreement with the Withers, assuring Aussies of the continued operation of the coffee shop that serves as hangout mostly of young professionals.

Withers Group Chief Executive Warren Wilmot said, quoted by The Sydney Morning Herald, "Our aim will be to make Starbucks the most successful coffee chain in Australia."

The Withers Group informed the store managers and employees of Starbuck's 24 stores of the change in ownership.

Despite the ownership change, Starbucks will largely remain the same, particularly the coffee flavours that Starbucks is known for.

"We are just focused on delivering the best quality coffee and the best customer experience we can and continue to focus on what we do well," added Jeff Hansberry, president of Starbucks China and Asia Pacific.

While Withers plans to open new company-owned Starbucks near existing 7-Eleven stores, especially in the commercial business district and metro areas, there won't be Starbucks within 7-Eleven stores.

Starbucks decided to sell out in Australia because of $143 million losses in its local operations due to stiff competition from other global brands such as Gloria Jeans, McDonald's McCafe and independent coffee shops. In 2008, Starbucks trimmed its Australian operations by shutting 60 unprofitable outlets and firing 685 employees.

Among the reasons behind the poor financial performance of Starbucks in Australia are low-foot traffic in many of the outlets, very high prices of its products, lack of marketing efforts and failure to appreciate the Aussie taste for good coffee.

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The Starbucks logo hangs on a window inside a newly designed Starbucks coffee shop. (Reuters)
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