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American coffee chain Starbucks denies Kenya entry plan

Starbucks
A Starbucks outlet in the US. AFP PHOTO | FILE 

US food giant Starbucks has denied reports of its plans to venture into the Kenyan market, offering relief to coffee house chains currently operating in the competitive casual dining segment.

The firm, which also abandoned plans to open a research and a support centre in central Kenya in 2009, Monday told the Business Daily that it would not be opening any new outlet in Nairobi soon contrary to speculation in local media.

“We have no plans as a company to open in Nairobi...not any that I know of at the moment,” said a representative of Taste Holdings, the brand’s South Africa-based franchise holder, in an interview yesterday.

The US firm was expected to open a research and support centre in Kenya in 2009 but shelved the plans and shifted attention to Rwanda.

Starbucks at the time said it changed its plans due to a tough operating environment in Kenya.

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The firm also cited the effects of violence that followed the disputed December 2007 presidential election results.

The Rwanda Farmer Support Centre coordinated by consultancy TechnoServe is currently used to boost the capacity of growers dealing in specialty coffee.

To date, Africa franchisee Taste Holdings has set up 12 Starbucks cafes in Johannesburg, Pretoria and Durban despite initially hoping to have 45 stores open by 2020.

Further expansion has now been ruled out as the company struggles to control operational costs and debt.

The middle-class in South Africa has been under pressure from slow economic growth, while the country is one of the most economically unequal in the world with 27 percent of the population jobless.

Global food brands that have set up shop in Kenya include KFC, Subway, Teriyaki Japan, Burger King, Hardee’s as well as Pizza Hut.

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