05 Nov South African owner of Starbucks and Domino’s to abandon food business
Taste Holdings, owner of the Starbucks and Domino’s Pizza enterprises in South Africa, is abandoning the food business, and has already sold its 13 stores of the coffee chain for R7 million.
The JSE-listed company announced the divestment, along with plans to sell Domino’s and two other food businesses, alongside its new strategy to solely focus on becoming a luxury retail group.
Taste had been trying to turn around its underperforming food business after putting Starbucks and Domino’s expansions on hold a year ago, but after months of canvassing potential partners and capital providers, it decided to exit the business.
In a recent statement, the company said: “Taste’s board of directors has therefore revisited the previous strategy and has decided that it is in the best interests of the company and all stakeholders to exit the food business.”
The Starbucks outlets have been sold to a company that was registered on October 31 by a Taste director with a long history of investment management.
In a separate statement, Starbucks said the sale would provide the necessary capital to achieve its ambition of having up to 200 stores in South Africa.
However, conditions are set to remain difficult for consumer-focused firms in South Africa, which has been struggling with a stagnant economy, high unemployment levels and rising living costs.