By Sharen Kaur
KUALA LUMPUR: Berjaya Food Holdings Bhd (BFood) continues to streamline its retail network, with Starbucks Malaysia's store count declining to 287 outlets, following 14 net closures, according to Hong Leong Investment Bank (HLIB).
Since opening its first Starbucks in Kuala Lumpur on Dec 17, 1998, BFood had expanded to around 400 stores nationwide.
BFood chief executive officer Datuk Sydney Quay told Business Times in March this year that 20 stores were permanently closed due to business considerations and expired tenancies, while nearly 30 stores were temporarily closed, mainly in Kelantan and Terengganu.
"Recent closures notably involved outlets in Subang Parade and Paradigm Mall, even though these are considered high-growth locations. In some cases, the decisions were driven by higher rental demands from building owners or plans to relocate to larger premises," said sources familiar with Starbucks Malaysia's operations.
"We expect Starbucks Malaysia to expand its operations in line with rising consumer spending in the country," he told Business Times.
According to HLIB, management is pursuing selective Starbucks expansion, targeting around 10 smaller-format stores, while focusing on consolidation, operational efficiency, labour productivity, and disciplined marketing.
It said that despite ongoing geopolitical tensions and intensifying competition from fast-expanding local and China-based coffee chains, same-store sales growth (SSSG) turned positive at +7 per cent for Starbucks Malaysia and +5 per cent for Brunei, indicating early signs of recovery.
Early performance from Iceland, where the group now operates two stores, has also been encouraging.
HLIB cautioned that near-term demand may remain subdued, making it challenging for Starbucks to fully reclaim lost market share.
Beyond Starbucks Malaysia and Brunei, BFood operates the Kenny Rogers Roasters (KRR) chain in Malaysia and the Paris Baguette bakery-café brand in Malaysia and the Philippines.
According to HLIB, the KRR store count fell to 37 outlets (3 closures), while Paris Baguette remained steady at 16 stores.
Reflecting early operational stabilisation and better-than-expected recovery momentum, HLIB raised its target price to 19 sen (from 15 sen). However, it maintains a SELL recommendation, citing ongoing structural headwinds and the time required for a sustained earnings recovery as limiting near-term upside.
BFood posted revenue of RM128.2 million in the first quarter of its financial year 2026 (Q1 FY26), up 11 per cent quarter-on-quarter (QoQ) and 3 per cent year-on-year, with a reduced loss of RM16.2 million versus RM33.7 million a year ago. The results exceeded both HLIB and consensus forecasts, driven by stronger same-store sales in Malaysia, growth in other Southeast Asian markets, and contributions from new Nordic operations.
Margin recovery was aided by cost-saving measures, store rationalisation, and lower depreciation. No dividend was declared.
HLIB expects FY26 and FY27 losses to narrow further to RM44.6 million and RM22.7 million, respectively, while CIMB Securities Sdn Bhd cautions that half-year losses could widen in the second half of FY26 due to competition, operating pressures, and potential marketing costs, despite short-term seasonal demand and government cash aid boosting Q2 FY26 performance.
Source: https://www.nst.com.my/business/corporate/2025/12/1327428/starbucks-malaysia-falls-287-outlets-peak-400-bttv
