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5 Reasons Why There Is No Starbucks in Perth

5 Reasons Why There Is No Starbucks in Perth

Nearly half of Australians consume coffee for an energy boost, focus enhancement, psychological benefits, and the like. But are you one of those who wonder why there aren’t any Starbucks coffee shops in Perth?

Why Starbucks Doesn’t Exist in Perth

Currently, there’s no Starbucks in Perth. Some of the reasons involve the locals’ preferences, the familiarity of taste, loyalty to certain cafes, the condition of the economy, and the effectiveness of the company’s adaptation strategies.

This may be surprising for some since coffee is highly popular among Australians. Even some barber shops offer complimentary coffee or beer to improve the client’s overall experience.

For more information about the coffee industry and Starbucks’ strategy in Perth, check out our list below.

Preference for European-Style Coffee

Preference for European-Style Coffee

European immigrants changed how coffee was consumed in 1930, and cities saw the emergence of coffee-cafes. Along with new immigrants came the beloved stovetop espresso makers, grinders, and the like.

A European-style coffee culture with roasting, grinding, and artisanal brews were firmly established in Perth – thanks to the waves of immigrants from Italy and Greece.

Then, the rest is history, as the Greeks and Italians introduced their love of espresso and conventional coffee preparation techniques. Larger Australian cities, such as Melbourne, now known as one of the nation’s ‘coffee capitals’, were particularly impacted by their influence.

Today, Perth is filled with lively and imaginative cafés, pubs, and bars selling fashionable, high-quality coffee for affordable prices.

It’s important to know that the modern Australian coffee industry differs significantly from most consumer markets. Independent speciality and third-wave coffee firms are generally underrepresented in the world’s major coffee-consuming nations.

However, global brands like Starbucks have always struggled to succeed in Australia. Smaller independent and speciality coffee shops thus dominate the business here. 

Coffee is constantly evolving, and coffee culture has developed naturally over many years. There wasn’t much room for a company like Starbucks to swoop in and start selling something else.

Starbucks Launched Too Quickly

Starbucks Launched Too Quickly

The coffee market in the country was already established when Starbucks arrived. This is why Australians were not so receptive of adjusting to a new market offered by the popular coffee franchise.

According to Thomas O’Connor, a principal research analyst at Gartner who specialises in consumer industries, Starbucks launched too quickly. It didn’t allow the Australian consumer to establish a hunger for the brand.

The company obviously couldn’t replicate the charm of neighbourhood coffee shops. They didn’t foresee this before making the investment and opening so many locations across the nation.

Moreover, Australians were accustomed to eating sandwiches and other delicacies at their neighbourhood high tea and coffee shops. At that time, Starbucks had no idea that customers would buy sandwiches to dine there.

Why, after all, would a local Australian go to a coffee chain where there’s no food available – when they could walk to a nearby, locally owned coffee shop and have a delectable treat?

Starbucks may have viewed coffee merely as a product, while many Australians don’t. Most of the latter view coffee as an experience.

So, it was common for locals to develop a relationship with their neighbourhood barista and stick with them rather than splurging on a foreign brand.

The Great Recession

The Great Recession

In 2008, Starbucks closed two-thirds of its locations in Australia. 

Keep in mind that the Great Recession was happening at the same time all around the world. Even though thousands of miles separate Australia and the United States, the recession affected these nations.

Although Starbucks had sufficient financial resources to continue operating, the spending power of its customers may have been hit. This is likely why they weren’t interested in investing in a new coffee brand.

Other More Familiar Coffee Chains

Other More Familiar Coffee Chains

Starbucks just didn’t appeal significantly to most Australians. While priced more than the neighbourhood cafes, the company offered sweeter coffee selections than Australians desired. 

They lost millions in its first 7 years in Australia, which led to the closure of 61 stores. If that doesn’t give you a hint, we don’t know what will.

This coffee chain assumed that Australia was sufficiently westernised to embrace them immediately despite its lack of awareness about preferences. 

There’s no substantial proof that Starbucks tried to stand out from the competition in the area too. This is in addition to the lack of alluring promotions after they were open. 

There wasn’t much of a possibility for Starbucks to beat their rivals without these elements. 

To help you visualise, here are some of Perth’s top cafes today and their best features that Starbucks may be unable to offer, especially at the beginning:

Some of Perth’s Top CafesTheir Best Features
Sayers Sister, NorthbridgeHas a centrepiece communal table for a homey feel and sells homemade cakes
La Veen, Perth Central Business DistrictOffers classes about making coffee
Bread in Common, FremantleProvides lunch and dinner meals
Satchmo, Northern PerthFrance-New Orleans fusion with a live jazz band
Architects and Heroes, SubiacoAppreciation for art, like a large mural depicting Galileo and other well-known figures

So, lower-quality coffee at a considerably higher price in these densely populated business cities may be off-putting to Australians. This is because the established cafés already serve the residents’ needs.

Lack of Adaptation

Lack of Adaptation

According to Associate Professor Nick Wailes, an expert in strategic management at the Faculty of Economics and Business at the University of Sydney, part of the issue is that Starbucks’ original business model doesn’t apply across all markets.

Starbucks’ initial success was greatly attributed to its bringing European coffee culture to a region lacking in such a tradition. However, businesses like them find competing extremely difficult with Australia’s distinctive and vibrant coffee culture.

Starbucks was successful in countries like China because it achieved something utterly consistent with the company’s fundamental competencies – it created a coffee culture in a nation that lacked it. 

The famous coffee shop would need to adapt its menu and customer service to meet Australian needs if it opened a location in Perth or Western Australia.

There you go! We hope you now have an idea why Perth doesn’t have a Starbucks craze, unlike the others.

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