Starbucks Malaysia reportedly shuts 50 outlets

Berjaya Food, which operates Starbucks in Malaysia, has reportedly temporarily closed 50 out of its 408 stores nationwide.

The closure reportedly represents 12% of all Starbucks outlets in Malaysia, according to The Rakyat Post. 

Just early this month, Starbucks Malaysia dismissed claims that it is shuttering more than 100 outlets in the country. The company said in a statement to Business Times that it has ceased only a few stores, and “most of the allegedly closed locations are only temporarily closed".

This is part of its ongoing assessment to align their presence while ensuring no job losses ensued, said the spokesperson. "Importantly, no employees have been affected by the permanent or temporary closures, as they have been reassigned to nearby stores to continue serving our customers seamlessly," the representative said.

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Nonetheless, the company has had a rough road in Malaysia. Berjaya Food, which operates the coffee chain in Malaysia saw a loss in the fourth quarter due to the Middle East conflict, which saw boycotts of the brand in Malaysia.

The company saw a net loss of RM38.2 million for the three months that ended in June, and sales fell by more than half.

“The significantly lower revenue and pre-tax loss incurred in the current quarter under review were mainly due to the current sentiment in relation to the conflict in the Middle East,” Berjaya Food said in the report published at the tail end of August.

In December last year, the ongoing boycott of Starbucks led RHB Group, Malaysia's integrated financial services group, to reportedly issue a research note advising investors to sell their shares in its franchise owner, Berjaya Food. The bank reportedly noted a 24% slip in stock prices at the time. 

The recommendation came after ground checks of Starbucks outlets showed at least a 30% fall in foot traffic last year. This is despite shopping centres being crowded, and most of Starbucks' competitors having regular footfalls. 

The fall in foot traffic, as RHB noted at the time, is a result of the ongoing boycott of the food and beverage chain due to its alleged support of Israel in the ongoing Israel-Hamas war.

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