Starbucks Malaysia is showing early signs of recovery after nearly two years of boycott-driven losses, according to its operator Berjaya Food Bhd.
CEO Sydney Lawrance Quays said the rebound remains gradual, but the trend is improving.
“The recovery is slow, but we do see that there is a positive sign moving forward,” he told reporters in Kuala Lumpur on Monday.
Berjaya Food’s first-quarter financial results, released the same day, showed its net loss narrowing to RM14.8 million, more than half of what it was a year ago. Revenue also rose 3.3% year-on-year.
These improvements come after the group recorded a record RM292 million loss for the financial year ending June, largely fuelled by boycotts linked to the Gaza conflict. Starbucks was among multiple Western brands facing consumer backlash in Malaysia due to perceived ties to Israel, reported FMT.
Waning Boycotts and Shifting consumer perception
Quays said the boycott impact has eased as more Malaysians understand that Starbucks Malaysia is fully operated by a local company, not the US parent entity.
He stressed that allegations linking the local franchise to the conflict are untrue, adding that nearly all employees are Muslims.
The company had earlier reduced its store count from 400 to 320 outlets nationwide, allowing local competitor Zuspresso to overtake it as Malaysia’s largest coffee chain.
Despite this, Quays believes the brand remains well-positioned to attract Malaysia’s growing middle class, as well as tourists, and can compete effectively against lower-priced café chains.
Expansion plans beyond Malaysia
Berjaya Food is also preparing for international growth, particularly in Europe. It holds the Starbucks licence in Nordic countries and is now planning its third outlet in Iceland, following the successful launch of its first store there in May.
Aside from Starbucks, the group also operates Kenny Rogers Roasters globally and manages the Paris Baguette bakery brand in Malaysia and the Philippines. Starbucks remains its strongest performer, contributing around 80% of group revenue.
Berjaya Food Bhd is part of Berjaya Corp, founded by Malaysian tycoon Vincent Tan. The company’s shares rose 2% on Tuesday, although they are still down about 25% year-to-date.
Analysts: recovery will be challenging
Analysts remain cautious about the brand’s outlook. Hong Leong Investment Bank analyst Syifaa’ Mahsuri Ismail said lingering geopolitical sentiment may continue to weigh on Starbucks’ performance.
She noted that the brand overhang from the Gaza conflict could “continue suppressing demand in the near term,” delaying any return to pre-boycott levels.
At the same time, Malaysia’s coffee landscape is becoming increasingly competitive, with local and China-based coffee chains expanding aggressively, intensifying pressure on the market.
