Starbucks, the world’s largest coffee chain, is considering a sale of its entire Japan business, which includes nearly 1,800 stores and could be valued at up to $3.1 billion. The company is also looking at bringing in a partner to take over operational management as it struggles with local competition and changing consumer habits.
Japan accounts for about 9% of Starbucks’ global revenue, but the brand has seen its market share erode. Competitors have grown stronger, and customers are increasingly turning to cheaper alternatives at convenience stores, fast-food outlets, and gas stations. High coffee bean prices have added further pressure on margins. The company operates more than 32,000 locations in 80 countries, with roughly 15,000 in the U.S. alone.
A pattern of restructuring abroad
This potential move fits a pattern of strategic retreats. Last November, Starbucks sold 60% of its China operations – around 8,000 stores – to private equity firm Boyne Capital for $4 billion. That deal allowed the company to free up capital while keeping a minority stake. In the U.S., Starbucks has closed hundreds of loss-making locations as part of a broad cost-cutting program.
Now Japan may follow. Analysts estimate the Japanese business is worth between 400 billion and 500 billion yen, or $2.5 billion to $3.1 billion. A full sale or a joint venture could provide Starbucks with funds to reinvest in its core markets and new growth areas.
Why Japan is no longer safe ground
Starbucks entered Japan in 1996 and built a strong brand presence over three decades. But the landscape has shifted. Local chains such as Doutor and Tully’s have expanded aggressively, often undercutting Starbucks on price. Doutor alone runs over 1,300 outlets, many located near Starbucks stores, offering similar products at lower prices.
Convenience stores, particularly 7-Eleven and FamilyMart, now sell high-quality drip coffee for a fraction of the cost. That has eaten into Starbucks’ customer base, especially among younger consumers. Meanwhile, the cost of arabica coffee beans has remained high for several years due to weather-related supply issues and rising demand, squeezing profitability across the industry.
Starbucks has not confirmed any final decision. The company is said to be in the early stages of a strategic review, with no deadline set. Sources indicate that potential buyers have already expressed interest, though no formal negotiations have been disclosed. The outcome could be a landmark deal in the global coffee industry, marking the end of an era for a brand that once seemed untouchable in Japan.
Źródło: WNP.PL, Fot. Karolis Kavotelis / Shutterstock
