The Rand Group plans to open a number of new Starbucks stores across South Africa in the coming years, says founder and head Adrian Maizey.
The group acquired 13 Starbucks stores from Taste Holdings in November 2019 for R7 million. However, this figure does not account for the additional debts and liabilities that the consortium will take on as part of the Starbucks acquisition.
In an interview on 702, Maizey said that over the next five years the group plans to reach a total of 75 stores.
He added that the Rand Group is also looking to expand further into Africa if everything continues as planned, and the business reaches scale.
“I think we are a luxury brand that happens to be in the QSR (Quick Service Restaurants) space.
“We (have) an offering to people of all LSM levels. There is an offering at the lower and higher-end if you would like it and we serve a broad part of the consumer market.
“But ultimately Starbucks is a luxury brand offering a superior customer service. That is what has worked around the globe in 80 different countries and something we would like to execute on here in South Africa.”
Maizey said that while the demand for this luxury offering is present in South Africa, it was important for the business to scale.
“If you look at where we are in the economy to date, and our sales are still good, then the upside from here is pretty positive.”
Taste Holdings sale
Listed management group Taste Holdings, announced earlier in November that it was abandoning its food business, starting with the sale of 13 Starbucks stores.
Taste said that it would require at least R700 million to reach positive free cash flow and that the Starbucks network will need to expand to between 150 and 200 cafés and Domino’s to between 220 and 280 restaurants.
“The company has, following detailed operational reviews and canvassing potential partners and capital providers, reached the conclusion that Taste should change its strategic direction and exit the food business,” it said.
“It has become evident that capital investment required for the previous expansion strategy cannot be secured, given the current structure of the business and existing market conditions. In line with the company’s change in strategic direction, Taste Food has entered into the agreement to dispose of the Starbucks business.”