Starbucks is planning an Australian revival

With cities such as Sydney and Melbourne perennially topping ‘best of’ lists when it comes determining the best coffee haunts in the world, it is no surprise that Australia is positioned by aficionados as one of the best countries to visit if you take your coffee very, very seriously. It also explains as to why Starbucks has struggled to make an impact in Australia. 

But a partnership with the Withers Group, fresh investment and a return to company owned stores could shake everything up.

Alongside poor real estate decisions, over-pricing and under-investment, the ingrained relationship with high quality coffee has seen Starbucks – a company so used to market dominance – struggle to find firm footing within Australia. After eight years of operating in the country, Starbucks had to close around sixty unprofitable stores, dispensing with the services of nearly seven-hundred members of staff in the process. With their local operations losing in the region of A$140m, the company was on track to become another American failure in the Australasian market.

The Withers Group, which oversees the convenience store and petrol retailer 7-Eleven in Australia, has acquired the local rights to the Starbucks name and will subsequently take over the remaining twenty-four locations that are still in operation. And they have big plans, with chief executive Warren Wilmot saying that their aim is “to make Starbucks the most successful coffee chain in Australia.”

As part of that process the group are planning to open company-owned stores in locations nearby established 7-Eleven premises.

However in a decision that may have long-lasting ramifications, the venture will not be looking to align itself within the more premium experience that many Australians turn to, instead opting to keep its core values that have served the company so well in other locations.

“We pride ourselves on knowing how to develop brands and we’re attracted to global brands that do a great job outside this market,” Mr Wilmot said. “We have a track record of being able to do that.”

Under the auspices of Russell Withers, the family group introduced the American 7-Eleven concept to Australia opening the first store in Oakleigh in 1977 and has since established the general store and petrol garage into the Australian conscience.

But can they repeat the feat when it comes to coffee?

photo: nayee* (Flickr) - used under Creative Commons