Starbucks Corp. set the opening date of its first India store with partner Tata Global Beverages Ltd. for next month, later than a previous target of August, as the world’s biggest coffee chain expands overseas.
Tata Global rose to a record in Mumbai trading, jumping by the most in eight months. The Indian company’s Seattle-based partner will also open a second shop early next year, John Culver, president of Starbucks’s Asia-Pacific business told reporters in Mumbai today.
Starbucks enters the world’s second-most populous nation as a recession in Europe and slowing growth in the U.S. have damped growth. In India, the coffee chain faces competition from Dunkin’ Brands Group Inc. stores, Lavazza SpA’s Barista Coffee Co. and Cafe Coffee Day, run by Amalgamated Bean Coffee Trading Co.
“We are looking at this venture from a long-term point of view,” said Culver. “We will open a series of stores and monitor consumer response and focus on the experience we provide.”
Tata Global gained 7.3 percent to 141.30 rupees as of 1:52 p.m. in Mumbai trading, a record high on a closing basis. Starbucks shares climbed 1.9 percent to $51.04 in New York on Sept. 27.
Starbucks cuts its fourth-quarter profit forecast in July, citing the recession in European markets and slowing sales growth in the U.S. It has already hired 60 employees in India.
U.S. consumer sentiment unexpectedly declined in July to the lowest level this year as Americans grew more concerned about their finances.
The Tata Starbucks Ltd. venture named Avani Saglani Davda, a 10-year veteran of Tata companies, as chief executive officer today, the company said in a statement.
Starbucks on Jan. 30 announced an equal joint venture with Tata Global Beverages, and said it plans to open as many as 50 stores in Mumbai and New Delhi in its first year. The venture will open its first store in August and have 50 outlets in Mumbai and New Delhi by the end of the first 12 months, Tata Global Vice Chairman R.K. Krishna Kumar said at the time.
Starbucks said in July that it will open as many as 500 new stores in the Asia-Pacific region this year, more than half of which will be in China.