Why Starbucks Failed In Australia 

Long story short, Aussies have good coffee that Starbucks doesn’t

Hot tip, you walk into a Starbucks in Australia, everyone knows you're a tourist

as someone who's always thought of starbucks as overpriced, oversweetened pishwater.... bravo Australia, good work on this one

As a former Starbucks employee this video is 100% accurate, I think one of the biggest factors was price. You can get coffee of equal or better standard for less money at just about any café in Australia, so there is really no reason to go to Starbuck's unless there is nothing else open.

I love how Australians are proud of Starbucks failing there.

Let me summarise: Starbucks coffee tastes like instant coffee. Why would we buy instant coffee for the same price as proper coffee?

I think a minor point that's missed is that Australian's are very well traveled with most of us having travelled internationally at least once in our lives, so we'd already been exposed to Starbucks at cafe's in other countries - and discovered it was terrible. Huge milkshakes and slushies disguised as coffees, or watery bland filter coffee. So Australians already had no interest in Starbucks when it eventually arrived in Australia.

in australia we are definitely snobby about our coffees….especially in melbourne. most people (like me) know starbucks for being over-priced, sugary fast-food coffee. honestly it’s really crappy when there are so many brilliant baristas here that serve better coffees and other drinks for better prices.

They were also probably shocked when they realised they couldn’t pay their staff $7 an hour here.

Australia already had a coffee culture, and Starbucks is rubbish.

When they finished up by saying that Starbucks is trying re-enter the Australian market by relying on tourist business, I went back and checked when the video was posted. Honestly, poetic, no notes. Also you don't need a whole video on market saturation and global financial crises to explain why they failed in Australia. The coffee is bad.

As an Australian I think Starbucks tastes more like coffee-flavoured milkshake than actual coffee

So Australians decided to get coffee that was better, from a person they knew and liked, at a place that was more friendly and convenient, and for a lower price? Nope, I still can’t figure out what went wrong... 🤔🙄😜

Is anyone else kinda proud of Australia for totally not giving a crap about Starbucks?

This video COMPLETELY misses the point. Starbucks couldn't compete on basic coffee flavor. Their coffee tastes terrible. Their baristas don't know how to make good espresso. Starbucks failed in Australia because Australian coffee--even at a lousy airport cafe--is way way way better than Starbucks. That the people in this video couldn't figure that out is just another sign of how coffee-impoverished the US is.

Starbucks came to Sweden 11 years ago and had 17 shops at the most, now there’s only 4 left and they’re only in the capital, Stockholm. Starbucks explains are that the rent is to high, but I would guess that Swedes just don’t care for bad coffee. Sweden coffee consumption per capita is one of the highest in the world, only Finland drinks more coffee. We love our coffee black and strong, not like the dishwater Americans call coffee.

I've lived in Australia for 2 years (back in the States now) and literally any coffee cart on the street can make better coffee than Starbucks. The coffee in Melbourne was especially good

For Aussies the question is why Starbucks succeeded in other countries

Grew up poor in a small rural town in Oklahoma and never was a caffeine drinker, I visit Starbucks once on a vacation trip to Dallas just to find out what all the hype was about, can't remember exactly what I order but what I do remember is that I paid for an overpriced coffee and sandwich, never managed to finish either as I could've gotten a similar product on a gas station for half the price.

As an Aussie, I've had some bad coffees from local cafes, but none of them got close to how absolutely crap a starbucks coffee is. I go for a flat white, and the Starbucks flat white was genuinely undrinkable. It wasn't just a bad coffee, it was a complete failure of a drink in everyway. Even a maccas or 7/11 coffee goes better than a starbucks, at least in my experience.

Why don’t they succeed here? Their coffee sucks. Aussies would rather go get better quality coffee, which can be found literally anywhere else

Starbucks opening in Italy is literally like selling ice to an eskimo. Good luck with that.

Australia:- "Keep Your Sugary dibeto troubles outta my continent "

Casual 'on/off' coffee drinker for the past 35 years . The "best" coffee I ever had was from a roadside food truck back in the early 80s. Used to work with my dad once in a while and he would stop there to get coffee before going to the construction site. Still remember how good that brew was !!

Update: Why Starbucks failed a second time in Australia. They decided to ignore the local market and go after the International tourists, and in 2020/2021 there aren't any International tourists.

*Simple, we Australians are huge coffee snobs and StarBucks coffee isn't that good*

I had the opportunity to visit Australia for two months x2. Once in 2019 and again in 2020. The food there is amazing! I couldn't believe how delicious everything is. Basically, we are not eating real food here in the States.There is a huge difference in how things taste. It's the same with their coffee. It has depth and flavor. We are so accustomed to our fake food, we can't tell the difference. It just tastes normal to us. It's not until you leave here and come back that you'll know. More than likely, SB was trying to feed them the subpar garbage that we're given here in the States ...THAT'S why it failed.They're not going to pay for that crap. One of my favorites in Sydney was chai latte. I remember my first time going to Starbucks after returning home. I ordered a chai latte, took a sip and spit it back in the cup. I threw it away. I was shocked at how watered down and tasteless it was. It took me awhile to get accustomed to this stuff we call food here. Sadly, it doesn't bother me anymore. I miss Sydney. I would love to go back again...

When I was a teenager in the 80s, Sydney cafe culture was already firmly established. Excellent quality and price in almost every suburb of Sydney - all of them small family cafes where you could see the barista make your coffee, and happily have a chat with them. Melbourne was the same. With Australia's two biggest cities already completely soaked in an excellent cafe culture, any new entrant was going to have a rough time. Starbucks never made sense here. It was a super-expensive mass-produced coffee of a lower quality than we had been getting for many decades. It was only a matter of time before the mounting losses forced them to surrender to reality. The only real surprise was that it took them so long to realise that it was never going to work.

Because Australians are too smart to pay $5 for a crappy cup of burnt coffee.

As an Aussie I was shocked at how bad the Coffee was when I was in the United States. Almost turned me into a tea drinker !! Servos at home have better coffee.

🎯 Key Takeaways for quick navigation: 00:01 ☕️ Starbucks' Global Expansion 00:25 🇦🇺 Starbucks' Entry into Australia 01:21 🚀 Rapid Expansion and Lack of Differentiation 02:13 ☕️ Australian Coffee Culture 04:06 🌟 Success of Gloria Jean's in Australia 05:03 🇮🇹 Starbucks in Italy and Starbucks' Comeback in Australia Made with HARPA AI

That's because Australia have their own coffee that's amazing already. I was there in the 90's & it's probably the first time I'd been anywhere that had coffee shops everywhere & they were mostly independent coffee shops ran by Italians. Don't forget Italians emigrated to Australia decades ago.

Inferior product at higher price its pretty simple.

My Aussie friend said to me: “Once you arrive in Australia, don’t go to Starbucks for coffee. There are better places.”

Melbourne alone has arguably, and actually award-winning, the best coffee in the World. It's incredibly unique there due to the milk and water used. Along comes Starbucks with their more expensive, coffee-flavoured milk with sugar and you wonder why it didn't work?

For most corporations to expand it needs to be done at a sensible rate. Often when companies rapidly expand they contract just as fast, like EB games/ game stop and second cup.

Bravo to Australia. They can see right through overpriced overhyped products, and chose to patronize the little guy.

An Australian here. Starbucks coffee is sweet, syrupy, horrible crap. That's the reason it failed.

Charbucks is to coffee as the Big Mac is to fine dining. Basically noting special, difference is the Big M is priced accordingly.

As someone who's worked as a barista for a specialty cafe and roastery, I cannot drink Earthbucks, it just tastes downright horrible

Because in Australia, there are too many alternative options for coffee. And they are also better.

As an Australian, Starbucks probably has the worst coffee in Australia compared to almost all coffee sold here. We have very high standards when it comes to coffee and I'm sorry to say this but Starbucks is overpriced for very low quality coffee.

NZ too

I'm from the US. The first time I ever went inside a Starbucks was in 2001 when I was living in Australia. There was one near the Rocks in Sydney that was popular but rarely crowded. I wasn't overly impressed. But I continued to go to Starbucks at Darling Harbour to buy steamed milk. I'm not sure why. The local coffee shops around my Sydney neighbourhood were much more enjoyable when I was living there. I now live in central Germany, and our only Starbucks (located in Kassel) closed down in 2021, I believe. I wasn't too sad to see them go. I do enjoy going to Starbucks at the Amsterdam Centraal when I am there, but I think that is more for the ambience than the menu. I love Gloria Jeans. They are my favourite coffee franchise. I was so excited when Gloria Jeans opened in Muscat (Oman) in 2014/15. One American franchise that might be successful in Australia is Peet's Coffee. But to my knowledge, they are still based only in the US.

Australians don’t have the same demand for big sugary frappuccinos and cake pops. We like simple, quality coffee from our local café

This is no surprise to me. That's like opening a Dominoes pizza place in Italy.

this is such a well organised video this is rly satisfying

Thanks for the detialed video! As an aussie, I wondered why they didn't seem to exist in my state. Never knew the history.

The answer is simple - Australians know what good coffee is and therefore how crap Starbucks coffee is. If you look at global barista competitions - Australian baristas are consistently highly ranked.

Respect to Australians for staying conscious about good quality and not getting carried away by the wave of american mass influences like so many european countries...

I'll always go to a local place rather than a Starbucks, even if it's a dollar or so more expensive at the small business, just since the coffee and atmosphere are better. I think Aussies in general are particular about everything we interact with, if we find a business that makes coffee we like, we will support and make a community within that circle. I've tasted some of the best coffee in less commercialized stores. (also the servo coffee is actually wayyyyyy better than sb anyways haha)

In Canada, Starbuck's use to be better but then they change some coffee types and raised prices. Some stores had comfy chairs and most bathrooms are kept pretty clean.

put short: we have cheaper, better coffee than Starbucks

Because we prefer coffee. On average the US hasn’t a clue what it is. They grew up on weak, percolated stuff. Our Italian immigrants schooled us.

It’s a pretty competitive market tbf. From my house in a normal suburb 30 mins away from cbd. I have 13 small cafes with 3km radius of my house.

Tip for anyone visiting Australia, don't go to Starbucks. Literally every other place is better.

starbucks failed in australia, because they are not stupid enough to buy 15 $ latte

The funniest part was the narrator calling a flat white a "speciality menu item"

Starbucks opened a shop in my town about 8 years ago and was closed with in a year. I used to drive past regularly and only saw customers in there a couple of times.

Considering the cafe culture in Australia where there’s a good coffee shop on every street corner…. Why on earth would you choose Starbucks over a local cafe? Even McCafe coffee is better than Starbucks

There are only 2 or 3 Starbucks in Italy. Anyone wonder why? Have a coffee anywhere in Italy and it’s better than in Starbucks.

If you're a tourist in Italy and buy your coffee in Starbucks you have failed the basics of being a tourist.

Glad to hear that. It is the awareness in people that lead to the failure of Starbucks in Australia. Hopefully, this awareness travels to other parts of the world. Thank you

How does it take almost 7 minutes to say 'their coffee was expensive and sucks'

As an Australian I actually forgot we even ever had Starbucks here lmao

Oh you're opening a store in Italy? That's like opening a dominos there

3:31 the burn!! 😆

Just a few points..... Pretty much all that has been said in this video clip is accurate but it is incomplete. The biggest two issues Starbucks had, competing with the local friendly Cafe were: 1. Wages. In Australia unions wield enormous amount of power in labour laws thanks to labour party and as such employing staff is an expensive endeavour. This is partly the reason why the vast majority of Australian retail business, and in particular the ones in food and drinks industry, will fail within 1 to 2 years. So while Starbucks is able to buy its wholesale coffee cheaper, The local friendly Cafe runs on minimum number of staff (usually just the business owner and their family) and/or staff that are paid cash and below minimum wages. 2. Population density and dispersity in Australia works very differently to US and Europe. In most places, if you take a square kilometre measurement of population in that vicinity, vs the availability of cafes and restaurants in the same vicinity, there is more restaurants with less people "in that vicinity" seeking to eat or drink. This is not the same in the US, Europe and many other places in the world where you have very high density of people packed into small places / apartments / offices and so on. Gloria Jeans also works in a very franchised manner and very much "lends" itself to how the local cafes work. Sure the menu is important as well, but it is on much lower degree of importance than the points I have mentioned.

Because their coffee sucks and costs a lot?

Because aussies prefer good coffee.

I didn’t know Starbucks just steamrolled it’s way into Australia like that, good for you Aussies and shame on Starbucks.

Coffee (from local cafes) in Australia is topnotch. Lived in Sydney for years and I won't drink SB coffee even when I was drunk. It was just so bad.

Answer: Because we Australians like actual coffee. Not crap.

Starbucks doesn't make sense in Australia. Nobody is going to ride a kangaroo across the plains for 2 hours, dodging deadly spiders and snakes, just to get a $15 cup of coffee.

Same thing happened to Starbucks in New Zealand - a lot of movement of the chain around Auckland.

I don't drink coffee, but I was on the road with a friend who is a coffee snob. We were walking around Launceston to find him a good coffee, and we stumbled upon this tiny little place in a small square through an alley behind a carpark. We knew, instantly, that it was going to be good coffee, just from the look of the place. We were right, he said it was fantastic coffee. I can't tell you the name of the place; I forgot, and I can't even find it on google maps. Places like that exist everywhere, you just have to look.

Starbucks is so overrated. Support your local coffee shops!

It's simple...Australalians like coffee to taste like coffee and not dirty sock water.

Thanks!

Agree on the sugar. Gloria Jeans coffee was great when in first opened. Three years later they changed the coffee to sugar water. So they went under as well.

People in Philippines drink Starbucks coffee not because it tastes good (because it doesn't), but because it shows they are wealthy enough to afford it.

Why did Starbucks fail in Australia? Bad coffee - simple We have amazing coffee here and we don't need a Grande coffee for $5. Starbucks is only for tourists, insta and Wifi.

The whole Australian coffee culture thing is so surprising to me. In 1975, 1983 and 1985 I spent almost a year altogether in Australia. Mainly in Brisbane and Melbourne. The lack of decent brewed coffee was one of my peeves there. Instant Nescafe coffee was available at any 'milk bar' but I don't remember ever seeing anything that resembled an espresso machine or even good brewed coffee. But apparently Australia society is completely different now. I wonder if they still like cold beer and wide variety of deep-fried foods?

I just love coming back here every now and then but particularly after visiting a nice little Cafe.

I don't blame Australia. Starbucks coffee is not really good and it's expensive.

I live in Sydney. The only people I really know who like Starbucks are preteen girls who only really buy it to post photos on Instagram.

In 1973 a gal I knew was working at a little hole in the wall coffee shop at the public market in Seattle. Back then if you wanted coffee that wasn't typical restaurant coffee you had to go to some bohemian shop. I was told that the owner offered shares to the workers for one dollar a share. She bought 20 thousand dollars worth. We were rolling on the groun

Never been in a Starbucks as a German as well. Seems to me like all other American food/drink brands like McDonald's and KFC. You literally taste the bad quality and mass production in their products.

Because Australians actually prefer good coffee

Starbucks - "Let's change our strategy to rely on international tourists." *Covid*

As an American, I am proud of Australians for exhibiting good taste and proper refinement. Like the Kardashians, Starbucks is a novelty that lasted well past its shelf date. Frankly, I am shocked Starbucks survived past the 1990s.

I'm from Melbourne and we're known for having incredible coffee so that cultural aspect to our coffee drinking is definitely a thing as well.

A seven minute segment to explain what an Australian can tell you in a few seconds. Our coffee culture was built on post-war Italian immigration, so we knew the best coffee long before Starbucks came along.

Starbucks in the coffee world is like Beats in the audio world... the quality is bad but you just pay for the logo.

TLDR that Simpsons episode with the "coffee / BEEER" scene is ridiculously out-of-date for Australian culture today. In the early 90's tea (from our English roots) and beer (from our English roots) were still our national drinks. We went through a whole transformation through the new millennium. You can almost track the swap between tea and coffee consumption in Australia with the studies showing the desire to leave the British monarchy behind. From initially embracing to quickly rejecting chain coffee shops, especially in Melbourne, we developed a taste for the bean itself, unadulterated by loads of sugar and syrup, which demanded local cafes with trained baristas and well-sourced beans. Now you can only find Starbucks in Australia still at places like big train stations and the international airports to which they connect. All of them will have a Starbucks for familiarity to international tourists. But they're not trying for Aussies anymore, except the "Muffin-Break nannas" (a local chain of mall cafes populated by older ladies, their daughters and their grandkids on "shopping day") who will go anywhere recognizable if they happen to be there perhaps to see a family member off on holiday. But for Aussie coffee lovers a badly-made coffee can ruin your whole day, and chain stores were aiming to productionize something that is truly artisanal, the beans sourced for quality not quantity and the barista will make sure it's made exactly as you ordered.

5 year update from an Australian Gloria Jeans is still around but it's not really that big anymore - some google searchs show there's around 153 (compared to 400+ at the time of the video) Local coffee places still reign supreme

in Melbourne we have thousands of great coffee shops, probably a result of lots of migration from italy in the 50s, we are used to good coffee, and dont trust corporate coffee

Australian here. Gloria Jeans is considered shithouse too, FYI

Have never been to a Starbuck's, even though there are dozens of locations in Germany. For starters, you can go into most any corner café and get a decent cup of coffee for a reasonable price.

In Australia we know what coffee should taste like. Starbucks is barely coffee.