Berjaya Food Berhad, the operator of Starbucks Malaysia, has temporarily closed 50 out of its 408 stores nationwide, equating to approximately 12% of its outlets.
This significant move comes as the coffee giant struggles with a reported RM31.82 million loss and intensified consumer boycotts.
According to The Rakyat Post, the closures, which doubled from the 6% reported in the previous quarter, reflect the challenges faced by Starbucks Malaysia.
Increased competition in Malaysia
Despite the country’s growing coffee market, the company reported a pre-tax loss of RM31.82 million (US$7.1 million) in the latest quarter.
BFood’s revenue dropped by over 50% compared to the same period last year, totaling only RM124.19 million (US$28 million).
The decline highlights the significant challenges Starbucks faces in Malaysia, which has been hit hard by ongoing consumer boycotts and increased competition from emerging coffee brands.
The overall macro environment still remain challenging, however continued positive improvement is observed with the
implementation of strategic initiatives and programs by the Group.”
“Looking forward, we remain cautiously optimistic that operational performance will gradually improve over the coming quarters. The Directors are committed to
strengthening the Group’s core business and investments,” BJFood said in a statement.
Uphill battle
Analysts suggest the brand is losing its foothold due to fierce competition from other coffee chains and shifting consumer preferences.
In response to the mounting challenges, Berjaya Food is diversifying its portfolio by expanding its Paris Baguette chain and exploring opportunities for international Starbucks outlets.
However, analysts warn that the company faces an uphill battle regaining its Malaysian market position.
