Why Starbucks Failed In Australia

When Starbucks set up shop in Australia, it was expecting big things. After all, we have similar metropolitan makeup to the USA and are among the most prodigious consumers of coffee in the world.

Alas, the company went the same way as Taco Bell, Chilli’s, Burger King and various other US franchises that failed to make the transition Down Under. This fascinating video explains precisely what went wrong.

In a recent CNBC video, Gartner research analyst Thomas O’Conner and other commentators explain how Starbucks managed to screw up a golden opportunity to become the McDonald’s of coffee in Australia. In short, they launched too rapidly and too aggressively, which turned Aussie consumers off the brand from the get-go.

Instead of growing organically, the franchise expanded to regional areas and outer suburbs from the very beginning, with 87 stores sprouting up in a very short time period. In the words of O’Conner: “[Starbucks] was too available.”

After seven years, the brand had accumulated US$105 million in losses and ultimately shut down the vast majority of its stores.

The full video, which we’ve embedded below, is definitely worth a watch. With that said, there are two thing that it fails to mention. Namely, Australian coffee drinkers have taste and are tighter than a fish’s anus. Starbucks tasted like rubbish and cost upwards of $5 a cup. Infer from this what you will.


The Cheapest NBN 50 Plans

Here are the cheapest plans available for Australia’s most popular NBN speed tier.

At Lifehacker, we independently select and write about stuff we love and think you'll like too. We have affiliate and advertising partnerships, which means we may collect a share of sales or other compensation from the links on this page. BTW – prices are accurate and items in stock at the time of posting.


20 responses to “Why Starbucks Failed In Australia”

Leave a Reply