Johannesburg – Taste Holdings is poised for growth after announcing last week it planned to develop up to 200 Starbucks Coffee stores in South Africa and this development could lead to an investment of as much as R2 billion and create at least 1 400 jobs. The target of 200 Starbucks stores will see South Africa become the country with the eleventh most stores after Turkey, which has more than 200 Starbucks stores. Starbucks has more than 22 500 stores in 67 countries with the US leading the way with more than 11 000 stores.
Taste was scheduled to open the first stores in the first half of next year, with between 150 and 200 outlets to be opened at a cost of between R3 million and R10 million a store, the company said this week. Between 12 and 15 Starbucks outlets will open within the first 24 months of the first store opening.
Taste chief executive Carlo Gonzaga said on Friday that customers could expect Starbucks stores in shopping malls and other public venues. “You can expect to see the stores at airports and also in drive-throughs where you do not have to get out of your car to get a perfectly hand-made cup of coffee,” said Gonzaga. Taste’s biggest risk was making Starbucks relevant to the local market, he said. These included adjusting the size of the international coffee cups which are larger than South African cups. “We are dealing with an international brand. We have to look after it and ensure there is good infrastructure, including IT and marketing, because there is a lot of expectation for us to manage it properly,” he said.
The company has previously said the stores would have a significant footprint in Gauteng. “We are going to bring the stores to Cape Town, Port Elizabeth and Durban but it will take time because we want to give the customers the best Starbucks experience,” he said. Each store was expected to have unique features, said Gonzaga, adding that flagship stores and drive-throughs were likely to cost between R7 million and R10 million each. Shopping mall outlets were to cost between R3 million and R5 million to set up, Gonzaga added.
The first store is scheduled to be opened by the first half of next year. Gonzaga said that between seven and 10 people would be employed at every outlet. “To have skills transfer from the world’s biggest coffee business is valuable for employees and local suppliers. They can take it with them anywhere,” he said.
Taste said it would raise R226 million through a rights issue to develop the Starbucks and luxury jewellery brand Arthur Kaplan.
Jean Pierre Verster, an analyst with 36ONE Asset Management, said Starbucks was a strong brand, and Taste needed money from the rights issue to fund the expansion. “Taste will need to significantly invest in the Starbucks store roll-out, that is why they are doing the rights issue,” said Verster. Taste has an exclusive licence for opening Starbucks stores in South Africa, the first in sub-Saharan Africa. The agreement is for 25 years and includes certain rights for other African countries. Taste has been expanding after acquiring global pizza brand Dominos, popular chicken franchise Zebro’s Chicken and luxury jewellery brand Arthur Kaplan.
From IOL News.