Starbucks Closes 70% of Its Franchises in Australia

It is bad days in Australia for the Starbucks Coffee franchise:

International coffee chain Starbucks will close 61 Australian stores within days, shedding 685 jobs as part of a strategy to slash underperforming outlets and boost profits.

Twenty-three stores will remain open in Melbourne, Brisbane and Sydney and surrounding areas after the closures this Sunday, an official statement from the company said.

Starbucks opened its first Australian store in Sydney’s Hyde Park in July 2000.

It currently has 85 outlets nationally, including in Brisbane, Sydney, Canberra, the Gold Coast, Melbourne, South Australia and Tasmania.

The announcement follows the decision by Starbucks last month to close 600 company-operated stores in the US, costing up to 12,000 jobs.

The company blamed poor real estate decisions, coupled with the troubled economy, for the US closures.

The company said the 61 locations to be closed in Australia were underperforming. [Yahoo News]

I saw on the news today that last year Starbucks Australia lost $36 million dollars in 2007 which is just a staggering number.  Personally I am not surprised because I have found the Starbucks in Australia to be of poor quality compared to the US franchises.  Also there is some good domestic competition in Australia against Starbucks such as Gloria Jean’s Coffe which is superior in quality.

So the fact that Australia is losing 70% of its Starbucks franchises comes as no surprise to me and I won’t miss them.