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Why Starbucks Failed In Australia

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Starbucks can be found all over the world, from Shanghai to Guantanamo Bay. But there is one continent that was uninterested in the coffee giant. Australians largely rejected Starbucks' attempted takeover, which led to an embarrassing retreat for the brand. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Find CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Starbucks Why Starbucks Failed In Australia | CNBC
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Text Comments (17097)
magicalex223 (22 hours ago)
Spoiler alert Gloria Jeans isn't popular here either
Samuraiwarm (1 day ago)
7-11 at where I live sells canned coffee at literally less than 50 cents, and honestly it tastes better than $5-6 starbucks. There's also 7-11 cafe that brews coffee by actual human, which is also great, at a cost of $1. People are still buying starbucks though, probably because they didn't trust 7-11 in terms of coffee. Most people would rather just follow the trends than try something different. Even when they try it, they would have a bias against what they were accustomed initially.
Mary Renaud (1 day ago)
Agree with Aussies...mostly very bitter coffee, plus cafes filled with weirdos all day so you have to fight for a seat in many USA cities. Not to mention absurd prices for plain coffee and tea. McD’s and Dunkin have them beat by a mile...
Mathew Kelly (1 day ago)
We have an actual coffee culture , and I'm not a coffee drinker
Kevin Bettinger (2 days ago)
Aussies don’t buy into the hype!
Allan Steele (2 days ago)
Tried canada,s starbucks coffee once and never went back for another,over rated and over priced...
Tom (3 days ago)
A 1 dollar coffee from 7 - 11 is better than Starbucks coffee
Anti Dhimi (3 days ago)
I'd rather buy McDonald's or Burger King coffe which tastes better than high priced StarBuck trash
Eric Small (3 days ago)
Starbucks isn’t even real coffee. It’s junk food just like MacDonalds.
Gana Ramesh (3 days ago)
Just came back from Australia tried the coffee there and it was crap
William Chamberlain (3 days ago)
SevenEleven is cheaper and tastes better, and literally everyone else from the Chinese bakery up makes better coffee than Starbucks. Aussies in Starbucks are there for either the cakes, or to recharge their phones and get out of the wind. "appetite for Starbucks brand" is just a way of saying that US coffee tastes like burnt toast, so Starbuck's repackaging of Nescafe instant coffee powder was an improvement.
No Name (3 days ago)
is there a five guys in aus?
NickVegas (3 days ago)
I've never bought a coffee in a Starbucks anywhere in the world that doesn't taste like hot water and milk.
Mp Pm (3 days ago)
Australians are real smart
Hey Its Noah (4 days ago)
Starbucks is still in australia
Ahmed A (4 days ago)
Starbucks is like American foreign policy. It leaves a bad taste in your mouth, which is why I never bought coffee from them.
blackrabbit212 (3 days ago)
In a thread of brilliant comments, yours is outstanding. You've made my day, Ahmed!
Cyber Prince82 (5 days ago)
Even 7/11 coffee is better than Starbucks
Robyn Lester (5 days ago)
We simply want to drink good coffee, not Macdonald’s style toilet water. Plus coffee culture in Australia has vibe, your barista takes pride is their craft and what they make for their guests.
D C (5 days ago)
every coffee shop in AU is much better than Starbucks, that's the reality, even 7 11 coffee is much better, only Asians are obsessed with Starbucks
Dennis (5 days ago)
Australia has taste
cymruisrael (6 days ago)
Probably because the Australians were smart enough to realise that Starbucks coffee is lousy!
Browntau (6 days ago)
Not only coffee culture from Italy and Greece, but also from Vietnam. We Aussies have access not only to some of the best coffee in the world, but also superb service in an environment that is the opposite of the "production line" approach in Starbucks. In Starbucks one person takes your order, someone else makes your coffee, then yells your name, often incorrectly. In a typical cafe, you may well already know the barista by name as they make your coffee for you while having a short conversation. They may well know you by name too. It's a far more friendly atmosphere, and the coffee is better. Seriously, why did Starbucks expect their inferior product to sell when they sold it for 30-50% more than the cafe's 10-20 meters away? Of course they tanked. Now we play the game of "Spot the tourist" as they line up for rubbish.
Joe Bowd (6 days ago)
MacDonald's McAfee killed Starbucks. They are everywhere and have the quality quick cofee market s Tied up.
William Chamberlain (3 days ago)
@Kira Lee agreed
Kira Lee (4 days ago)
Not really, it's only for people that go to McDonalds. Independent cafes are everywhere and they're all better. And even 7-Eleven coffee is better than Starbucks.
Bee (6 days ago)
Because we already have good coffee
Just Me. (6 days ago)
N we're proud we got rid of them 😁
Daniel Bonner (7 days ago)
Who the fcuk wants to put that poison in their bodies everyday...fcuk outa here a glass of water please 👌🏿
Guru Sandirasegaram (7 days ago)
Starbucks don’t know how to make flat white Plus topicals countries coffee is not good tea is good. Those Italian & Greeks people drink coffee
Just Me. (6 days ago)
Yeah, I never drink coffee, it's disgusting n unhealthy. I love my Dilmah Tea, won't drink any other than Dilmah.
Gort Newton (7 days ago)
Those speakers appearing on-screen don't know. I do. I studied what Starbucks did. Even the voice-over has got lots of things wrong. I love all those 'business experts'.
Brendan Grossman (6 days ago)
Go on
Sox Mate (7 days ago)
It failed because it sucks. Aussies are no fools.
David Zhang Gaming quickscope king (7 days ago)
Starbucks is a stupid and a liar
Caesar (8 days ago)
Australia is a country, not a continent
Just Me. (6 days ago)
Ummm, where are you from? It's a Continent, not a Country. Do you know the difference?
SFB (8 days ago)
because its absolute dogshit coffee mate
Adam Osborne (8 days ago)
Terrible coffee, Starbucks looks gimmicky. Starbucks seems like a cafe Starbucks seems like MacDonald’s
Grimgore Ironhide (8 days ago)
The prefer drinking Fosters Lager according to the numerous Fosters beer commercials I have seen.
Grimgore Ironhide (7 days ago)
@Robert Manly It's a joke.
Robert Manly (7 days ago)
You do realise that nobody in Australia drinks Fosters, right??
Alumy2460 (8 days ago)
I once had a cup of coffee at a Starbucks in the Adelaide CBD. The coffee itself was nothing to write home about and the ambience more resembled that of a fast food chain than the "at-homeness" I'd long grown accustomed to in the high-quality owner-operated cafes that these days are everywhere, even in outer suburbs and small country towns. Not much more to be said really.
Ai Rui Sheng (8 days ago)
Our coffee is nearly good as coffee across the ditch, (New Zealand), so why would we drink slops from Starbucks.
Anton Dereke (8 days ago)
sorry but I've never tasted their coffee before
RD4590 (9 days ago)
CNBC: What's wrong with corporations in this region Fox News: What's wrong with this region
Simran Sandhu (9 days ago)
Waiting for Tim hortons in Australia.
Antler Wales (9 days ago)
Starbucks coffee is - ghastly - tastes like dish water. Australian cities have good small independent coffee shops that provide - decent - coffee.
XBOXRULES (9 days ago)
australians are newbies to coffee, even starbucks has only been around since 1975. Vancouver has a coffee culture going back to the 1800's with Nabob.
XBOXRULES (6 days ago)
@Toby Silva Because starbucks is from seattle, look up the proximity on a map, kiddo.
Toby Silva (7 days ago)
Why bring Vancouver into this? Pointless.
XBOXRULES (9 days ago)
australia is a prison, look it up.
XBOXRULES (7 days ago)
@Robert Manly I'm sticking with my original comment, but thanks anyways.
Robert Manly (7 days ago)
Look up where all the prisoners were sent by England before the US war of independence. When they couldn't send them to the American colony anymore they had to find somewhere else.
Yuri Maia (9 days ago)
australia isnt a continent
Bee (6 days ago)
It’s both a continent and a country :/
Gordon Haynes (9 days ago)
The reason Starbucks failed in Oz is that we know and love real coffee, not that over-hyped, over-flavoured, over-sweetened dishwater that Starbucks passes off for coffee.
jean carlos perdomo (10 days ago)
Australia is a country, it's not a continent, please said the right thing
two turntables (10 days ago)
Maybe Tim Hortons should take a chance down there....
Alex Bugarcic (10 days ago)
I love how Brisbane looks like the Gold Coast at 5:48.
Tony Dixon (10 days ago)
Starbucks coffee is rubbish. Gimme Caffè Nero.
Hardie Productions (11 days ago)
My local Gloria Jeans Coffee was forced to leave my mall after they tripped fire alarm because they burnt a CROISSANT!
Matthew James (11 days ago)
There's one near my place. In Victoria poscovale Rd Melbourne
Bobbydazzlla (11 days ago)
I love how economists and managers will blame everything else but...........their crap tasting coffee. Lesson not learnt, apparently.
db60615 (11 days ago)
Because they're smart enough not to pay $6 for a small cup of coffee.....
cLonE 8ty 7 wIt dAt 11 (12 days ago)
Starbucks coffee is trash anyway and over hyped
Paul Jamieson (12 days ago)
In a kids voice "ill go to italy then".
Jay Ron (12 days ago)
We may not have Starbucks but we have Zarafes in Toowoomba
Jay Ron (12 days ago)
We may not have Starbucks but we got zarrafes in Toowoomba
KitKat Kitty Kat Kate (11 days ago)
Jay Ron you wrote this twice
Some person dot dot dot (13 days ago)
I don't drink coffee. Nor do I care about it, but for some reason I decided to watch this video.
Celestial Ivory (13 days ago)
*Nothing can match Australia’s coffee*
Sundance (13 days ago)
I literally pick any other coffee shop over Starbucks always.
charlie (14 days ago)
Already enough American slop here already😝
Honest John (14 days ago)
****bucks tastes like it's had old moccasins festering in it. Moccachino anyone ?
Dean Styles (14 days ago)
From my experience, the coffee at Australian Starbucks stores tasted burnt and quite unpleasant (although I haven’t been to one here in a few years). The cheap stuff at service stations/convenience stores tastes better IMO (let alone the independent cafes). The Starbucks coffee I’ve had in the US tasted just fine. Also I don’t know of many people who have sugary flavouring syrup added to their coffees here.
Richard's World Traveler (14 days ago)
When I first started going to Colombia about 2012 there were no Starbucks. The Juan Valdez cafes or the OMA restaurants have extremely good coffee. Way better than Starbucks which seems to be over roasted and bitter. Anyways, they started having Starbucks in Colombia around 2014. This year they plan to have about 50 stores in Colombia. There is no way their coffee is better. The people are just enjoying the different culture or something.
Daniel Martinez (15 days ago)
Why does the dude at 3:00 talk as if he was pulling his balls when he ends his sentences?
Sergio Salamanca (15 days ago)
Australia is not a continent*
Michael Hood (15 days ago)
I tried every coffee theirs is the best unless These Australians just Like dirty water that they get at Duncan nasty stores
S Duck (15 days ago)
Kangaroo don't drink coffee
The Man Who Laugh (15 days ago)
7-Eleven $1 Coffee > starbucks.....
FitandFlo (15 days ago)
I live in Australia and i havent seen starbucks, i've only had one in Malaysia
I'm Yang (14 days ago)
In Malaysia coffee shop we call it 'Kopitiam' selling hot coffee at Rm1.60 while Starbucks sell it at Rm16.00, that's overpriced.
Hey its Andreia (15 days ago)
They have 119 in LA and less than 9 in Sydney LMAOO
Bob Biggley (16 days ago)
I brew my own..Don Franciscos
Dylan doow (17 days ago)
I went to one in Manly and the coffee tasted pretty good. but like they said the over supply of chain stores meant if you were holidaying in a major city you were less likely to visit a Starbucks because customers more likely opt for a independent coffee shop that is unique to their experience of that city. Another thing is people who regularly drink coffee drink it pretty much everyday and most people commute to work from satellite suburbia another thing that is destroying competing markets is Mcdonalds drive thru mccafe.
Kanye West (17 days ago)
Vox=Cheddar=CNBC *Visible cobfusion*
Dabber Mcgee (7 days ago)
Cobfusion? Was that a joke because if it was that was a little bit... Corny
Quix (18 days ago)
This is exactly the same strategy they used and Canada and it worked there.
Sahal E. M. Patel (18 days ago)
Quix Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
AWF1000 (19 days ago)
because the coffee machine taste like it was never cleaned..
spicecrop (19 days ago)
Starbucks sucks. My brother is addicted to that swill and throws a fit if he doesn't have Starbucks every morning. It's overpriced crap.
peter oht (19 days ago)
Starbucks make crap coffee so maybe the Australians are the true coffee connoisseurs. There are heaps of niche coffee places in Australia and even the worst of these make better coffee than Starbucks.
Sahal E. M. Patel (16 days ago)
peter oht L😂L! Please stop talking! Thank you.
peter oht (16 days ago)
Sahal E. M. Patel nescafe....hahahahaha..oh mt goodness, enough said. Oh dear. I understand you now. Your idea of coffee is nescafe ROTFLMAO.....your hole is getting deeper. Stop digging mate.
Sahal E. M. Patel (16 days ago)
peter oht well I said it because you were wrong if you were not I would not have done it. Well yeah I mean I can purchase the Nescafé sachets in bulk and do it if it was just basic coffee and even though those sachets are also flavoured they are different to Starbucks. Sugar is not a factor so that is also incorrect! If I want straight coffee I can get it at my own will.
peter oht (17 days ago)
Sahal E. M. Patel very accepting and tolerant yet calls me derogatory names and tells me I am wrong in bold. That is accepting and tolerant hahahahaha...hahahaha...coffee without flavour is bland? Sheesh, you are good at shooting yourself arent you? You have just told the world you are not a coffee drinker if you cannot take coffee straight...which proves the point starbucks makes crappy coffee and you like sugary drinks. What an .....
Sahal E. M. Patel (17 days ago)
peter oht *Hey!!!! You’re wrong!!!!!* I am a very accepting and tolerant person. You don’t want the flavours and wish to be bland fine with me however I don’t want to. No thanks. Starbucks is not $10 for drain water! Their Frappuccinos are fantastic. Don’t like them find something else. Simple.
Anonymous Guy (19 days ago)
Starbucks failed because their coffee kept falling out
g8620784 - (20 days ago)
I don’t think Australia is a continent...
Sahal E. M. Patel (18 days ago)
g8620784 - it is a country and an island-continent
Anything Everything (20 days ago)
If starbucks failed in 3rd world country the comments would be different. Many will critize the country.
William Chamberlain (3 days ago)
I thought they were doing OK in Florida?
Thee Silent (20 days ago)
Starbucks was the worst coffee I've ever tasted and tried in 3 different countries. (Gave it 3 chances because of the buzz around it) Rather get cheap coffee from a machine in Australia and it would taste no different or even better than Starbucks honestly
Sahal E. M. Patel (18 days ago)
Thee Silent Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
Zach s (21 days ago)
Yea nah i prefer $1 seven eleven coffee
Sahal E. M. Patel (18 days ago)
Zach s Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
ajp2223 (19 days ago)
Nothing wrong with 7/11 $1.00 coffee at all... also at times you can get a good deal on their sandwiches!
Bruno Jose Fonseca (21 days ago)
Am I the only one who is bugged by the fact that he called Australia a continent 2 times?
FinallySeb (21 days ago)
I live in Australia and I have to go to Indonesia to get Starbucks :l
Sahal E. M. Patel (18 days ago)
FinallySeb Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
Selcuk Cilek (22 days ago)
good news. hope the same happens in Italy.
Gerardo Gomez (22 days ago)
They have real coffee
Sahal E. M. Patel (18 days ago)
Gerardo Gomez Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
Peteri Burson (23 days ago)
Starbucks coffee is crap, has no taste and is luke warm. Americans have no idea on coffee. Stick to burgers and fries
Sahal E. M. Patel (12 days ago)
Peteri Burson yes I will as usual!
Peteri Burson (14 days ago)
@Sahal E. M. Patelyou on their pay roster... go convince them 😂😂😂
Sahal E. M. Patel (14 days ago)
Peteri Burson well maybe they should see how Starbucks is not a flop anymore and how it is becoming more successful slowly however steadily.
Peteri Burson (16 days ago)
And you can leave me alone now and move on to the other hundreds of people on here who have also commented how crap their coffee is.
Peteri Burson (16 days ago)
But in Australia it's a flop which is what this you tube video is about....who cares about the rest of the world if they like crap coffee.
Stephen Bennett (23 days ago)
McDonalds do better coffee than Starbucks. I only ever go in there to change my daughter's nappy.
Sahal E. M. Patel (18 days ago)
Stephen Bennett McDonalds is so bland and even if it’s cheap I won’t waste a damn cent! Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
Åsmund Helland (23 days ago)
I like the hot chocolate and the frappe
Sahal E. M. Patel (18 days ago)
Åsmund Helland me too there’s a lot more than coffee. Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
The Life of Tony (24 days ago)
We were spoilt by the Italian migrants who came to Australia specifically for the Snowy Mountains hydroelectric scheme. They brought their love for coffee with them and introduced coffee to the country. Before that, no one really drank coffee in Australia. When Australians were treated to the muck that Starbucks serves, they understandably turned their noses up at it. Not only that, the audacity of serving coffee in a paper cup and having to stir it with a piece of wood... no wonder they failed here.
MrArukimasu (24 days ago)
Horrible tax avoiding company! Glad to see them fail
Skeezix (24 days ago)
Because Howard Schultz is an idiot who sold the Sonics that’s why
Gavin Varian (24 days ago)
You didn't mention Little Creatures Brewery at all
Aran Kumar (25 days ago)
Now love the Australian more then ever. Always goes for authentic stuff then some extra added sugar
Hyacinth (26 days ago)
Ironically the starbucks stores in Australia are now revived again by the massive Asian immigrants
Sahal E. M. Patel (18 days ago)
Hyacinth Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
23GreyFox (26 days ago)
I don't drink coffee. Don't like the taste.
thatfatguyinthetoilet Chungus (26 days ago)
Australia Aint a Continent, it's Oceana, Lol.
Photovideo Oz (25 days ago)
Oceania is a geographic region, Australia is a continent
TheSoundOfTwang (26 days ago)
2:49 The Australien valley-girl.. My bloody ears
martybadboy (17 days ago)
That accent is rampant now in OZ. Terrible.
Sheriden (23 days ago)
What?
Carl Parkes (26 days ago)
Starbucks coffee was crud. :) Australia is a coffee snob.
Sahal E. M. Patel (18 days ago)
Carl Parkes Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
orionh3000 (26 days ago)
shame on Australia for not liking Starbucks :(
Sahal E. M. Patel (18 days ago)
orionh3000 exactly! Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!
23GreyFox (26 days ago)
Yeah it's a shame for not liking a more expensive with less quality brand...
Alexey Samokhin (26 days ago)
The reason of Starbucks failure in Australia is very simple: coffee culture is very developed in Australia and Starbucks coffee just purely from the quality and taste perspective cannot compete.
Alexey Samokhin (18 days ago)
Sahal E. M. Patel )))))
Sahal E. M. Patel (18 days ago)
Alexey Samokhin Starbucks today is really growing in Australia! They have a huge variety of fantastic flavours and products! We definitely need to see a lot more stores right across the country! People don’t know what they are missing out on!