Africa rising

27 July 2015 By Carol Ryan

The coffee giant has been blitzing China, but its move into South Africa is more cautious. Although the country offers a growing middle class, GDP growth is slowing. And too few Africans can afford the “Starbucks experience” for rapid expansion across the continent.

This content is for Subscribers only

Context News

Starbucks reported on July 23 that its third-quarter net earnings jumped 22 percent to $626.7 million.

The coffee group announced on July 14 that it will open stores in sub-Saharan Africa for the first time next year. It has agreed a 25-year licensing deal with Taste Holdings, a South African company whose shares rose 20 percent on the news.

The Starbucks deal includes rights to other African countries, Taste said, without giving specifics.

Around half of the company’s 21,366 stores at the end of 2014 were run by licensees.

The IMF forecasts South Africa’s economy will grow by 2 percent in 2015-16. It has also flagged severe electricity shortages and a 25 percent unemployment rate as challenges.

Email a friend

Please complete the form below.

Required fields *