Starbucks to close 61 Australian stores

MELBOURNE: Starbucks Corp plans to shut 61 of its 85 coffee shops in Australia and focus its remaining operations on three major cities, the US company said on Tuesday, as part of a major belt-tightening program.

The Seattle-based chain, facing a US consumer slowdown, higher food costs and more competition, had said this month it would close 600 unprofitable outlets in the United States but would continue its expansion in international markets.

Starbucks Chief Executive Howard Schultz portrayed the Australian move as a refocus of operations, not a retreat.

“We are well into the implementation phase of transforming Starbucks and we believe this difficult, yet necessary, decision to close stores in Australia will help support the continued growth of our international business,” he said in a statement.

Starbucks first opened in Australia in 2000 as part of a rapid global expansion, but faced a highly competitive market with a well-entrenched coffee culture in the major cities.

The company said it would now refocus its operations on the cities of Sydney, Melbourne and Brisbane.

Gourmet coffee shops are already a common feature in Sydney and Melbourne, Australia’s two biggest cities, where a cosmopolitan cafe culture has thrived since postwar Italian immigration introduced espresso to the nation in the 1950s.

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