JSE-listed Taste Holdings, which owns the South African licence for Starbucks and Domino's Pizza, has gone back to the drawing board when it comes to the iconic coffee brand. The bottom line, according to CEO Dylan Pienaar, is to avoid the mistakes of the initial roll-out. Expect smaller stores in the future and franchise openings in Cape Town with an eye to Bloemfontein and Port Elizabeth.
Now is probably not the best time to be in the South African food and retail space. Consumers are tightening their belts, business confidence is low and the economy contracted a whopping 3.2% in the first quarter.
There is even evidence that upper-income South Africans are feeling the pinch. According to the latest Old Mutual Savings and Investment Monitor survey:
"Lower-income households are under the most pressure, but it is certainly significant that middle- to upper-income families are showing higher levels of financial stress as well."
But even when times are tough, South Africa's more affluent classes are hardly going to ditch their espresso-based lattes for instant coffee. So one would expect that Starbucks could make a go of it here -- South Africa does have a class that likes to sit in cafes...
Read the full story on Daily Maverick.
AllAfrica publishes around 600 reports a day from more than 150 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.
Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.
AllAfrica is a voice of, by and about Africa - aggregating, producing and distributing 600 news and information items daily from over 150 African news organizations and our own reporters to an African and global public. We operate from Cape Town, Dakar, Abuja, Monrovia, Nairobi and Washington DC.