Tata Starbucks bullish on India despite hiccups: CEO Navin Gurnaney

“It will take around six to eight months for pre-Covid level sales to happen,” says Tata Starbucks CEO Navin Gurnaney
Tata Starbucks CEO Navin Gurnaney, who took charge of the iconic coffee company in India in early 2019, tells Pavan Lall that despite the pandemic having temporarily closed a third of their outlets, the company’s expansion plans for the country remain intact. Half a dozen more stores are slated to open before the end of August. The company, which saw revenue increase four times to Rs 447 crore in FY20 over four years, also launched its first drive-through in Chandigarh, introduced turmeric-infused products and will be revamping its packaging and delivery containers. Edited excerpts:

In the US, Starbucks has shifted to a takeaway-only model for now. Will that happen here, too? What about other influences from Starbucks in foreign markets? 

We can do one or two takeaway-only stores, but not in as big a manner as in the US because we are still building our presence here. We introduced a honey-turmeric latte that may go to other markets and from Indonesia, we brought in a one-litre bottle of freshly brewed coffee that families can have at home. It’s priced much lower than what the same number of cups would have cost. The learning from and across markets is always happening.

How has Covid-19 impacted your stores and growth plans?

We opened our 190th store recently in Lucknow and will soon be celebrating our 200th store in India, though I can’t tell you when. 

We have six more stores lined up before the end of August. Malls are closed as are some offices, which has led to around 60 of our stores being temporarily shut. So we have no illusions about having the same levels of pre-Covid sales. It will take six to eight months for that to happen.

What’s new on the menu and how do you plan to restore customer confidence?

We opened a large drive-through in Chandigarh, which is an interesting feature in a time like this. It will take less than five minutes to drive through and get your coffee. Instead of the traditional speaker order system, a partner (as Starbucks calls its employees) will meet you at the drive-through to take your order. So that eliminates any technological or communication bottlenecks. Beyond that, we have partnered Swiggy and Zomato and in two weeks, you will see a new packaging system to prevent spillage. The artwork for it is complete. We noticed that in the previous packaging, the spillage concern was 35 per cent. Now it is down to maybe 2 per cent.

On the product side, cakes — great for home celebrations — and home-style healthy Indian food menus will be coming soon. The most important thing for customers is safety. Scans, sanitizers, masks, and distance cues are standard. There are partitions at the counter and all our partners wear shields and masks. 

Have you rationalised your rentals for all 188 stores?

Our relationship with all our landlords has been fantastic and we have amicably sat down and arrived at a win-win; so no complaints there. 

A problem of this size has to be sorted in collaboration with all concerned. But do note that week after week we see sequential increase in business. It’s not going to be a V-shaped recovery, but it is coming back.

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