Sophisticated Australian coffee culture sinks Starbucks

30 July 2008

While it’s of little help to the seven-hundred Australian Starbucks employees who are looking for new jobs today, you’d think any established coffee franchise would undertake some reasonably comprehensive market research before opening no less than eighty-four cafes.

This where some stores are in fairly close proximity to each other, and further, were opened in quick succession, particularly in a country which already has an entrenched coffee culture.

Associate Professor Nick Wailes, a strategic management expert at the University of Sydney, said Starbucks had failed to understand the Australian market. “Starbucks’ original success had a lot to do with the fact that it introduced European coffee culture to a market that didn’t have this tradition. Australia has a fantastic and rich coffee culture and companies like Starbucks really struggle to compete with that.” The president of Starbucks Asia Pacific, John Culver, admitted: “I think what we’ve seen is that Australia has a very sophisticated coffee culture.”

Originally published Wednesday 30 July 2008.