Tata Starbucks rewrites its India playbook after crossing 500 stores, eyes high single digit growth

For Tata Starbucks, the playbook is no longer only about planting its green twin-tailed mermaid logo in more Indian cities. After years of expanding its café footprint, the coffee-chain is turning its attention to what happens inside those stores.

Tata Starbucks expects revenue to grow at a high single digit rate in the coming quarters, supported by improving sales at existing cafes and selective store additions, as the coffee chain shifts its attention from rapid footprint expansion to generating more business from each outlet.

The joint venture between Tata Consumer Products and Starbucks reported an 11% year on year increase in revenue during the quarter ended June 2026. Its same store sales grew in the mid single digits even after adjusting for a favourable base, according to Tata Consumer managing director and CEO Sunil D’Souza.

“Starbucks had one of their very good quarters. Revenue was up 11%,” D’Souza told analysts. The year ago quarter was affected by temporary store closures during Operation Sindoor in May, but the latest performance remained healthy even after excluding that impact, he added. 

The company ended the June quarter with 498 Starbucks stores in India, compared with 502 at the end of FY26. Four outlets were opened during the quarter, including Starbucks Reserve stores in Kolkata and New Delhi, indicating that the company also closed some locations as it reviewed the quality of its network. 

“We did close some cafes in the short term,” D’Souza said, without specifying the number or reasons behind individual closures. The company also relaunched Starbucks Rewards during the quarter to increase customer engagement and visit frequency. 

Growth to come from stores and repeat visits

Tata Starbucks’ near term growth will be driven by a combination of mid-single digit same store sales growth and new cafe openings, rather than expansion alone. “Chain store sales growth was mid-single digit. That coupled with new store openings, I think you should expect close to a high single digit top line growth going forward,” D’Souza said. 

The outlook suggests a more calibrated expansion phase for the coffee chain, which crossed the 500 store mark in FY26 after expanding from 185 outlets in FY20. Its network had reached 502 stores across 81 cities by March 2026. The company said its strategy is to deepen penetration in existing cities while continuing to enter Tier 2 and Tier 3 markets and experiment with formats. 

Valued at over $20 billion, India's cafe and coffee shop market, is expected to touch $31.4 billion by 2031 while expanding at an 8.9% yearly growth rate, according to Mordor Intelligence. 

Rivals like Blue Tokai operates approximately 240 outlets, with plans to expand to 800 stores by FY30, and Third Wave operates over 220 company-owned and company-operated (COCO) cafes.

Meanwhile, Tata Starbucks added 58 net new stores in FY25, taking the total to 479 across 80 cities. By the December 2025 quarter, the network had increased to 504 stores after 12 net additions. The subsequent moderation in store count signals that expansion is being accompanied by portfolio rationalisation. 

The Starbucks performance came during a strong quarter for its parent. Tata Consumer Products’ consolidated revenue increased 12% to ₹5,349 crore, while EBITDA rose 19% to ₹730 crore. EBITDA margin expanded 70 basis points to 13.6%, and group net profit grew 29% to ₹427 crore. 

For FY26, Tata Consumer crossed ₹20,000 crore in annual revenue for the first time, reporting consolidated revenue of ₹20,290 crore, EBITDA of ₹2,815 crore and group net profit of ₹1,547 crore.