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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
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.
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
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
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
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 Cafes
|Their Best Features
|Sayers Sister, Northbridge
|Has a centrepiece communal table for a homey feel and sells homemade cakes
|La Veen, Perth Central Business District
|Offers classes about making coffee
|Bread in Common, Fremantle
|Provides lunch and dinner meals
|Satchmo, Northern Perth
|France-New Orleans fusion with a live jazz band
|Architects and Heroes, Subiaco
|Appreciation 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
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.