KUALA LUMPUR, Nov 25 — Starbucks’ Malaysian operator says business is finally beginning to climb back after nearly two years of boycott-driven losses linked to the Gaza conflict — but analysts warn that the recovery may not be enough to reclaim its former dominance in the country’s booming coffee market.
Sydney Lawrance Quays, chief executive of Berjaya Food Bhd, told Bloomberg the rebound remains fragile but visible.
“The recovery is slow, but we do see that there is a positive sign moving forward,” he said in an interview in Kuala Lumpur yesterday.
Fresh first-quarter numbers released the same day showed net loss narrowing by more than half to RM14.8 million, while revenue ticked up 3.3 per cent year-on-year.
It is a welcome break from the company’s record RM292 million loss for the financial year ending June, a nadir reached after months of boycotts targeting Western brands perceived to have ties to Israel.
Quays said the backlash — which led to store closures and plunging sales — has begun to ease as more Malaysians realise the local franchise is Malaysian-owned and not linked to the conflict.
“Virtually all of his employees are Muslims,” Bloomberg reported, citing Quays’ attempt to dispel persistent allegations circulating online.
Even so, the damage was deep.
Berjaya Food cut its Starbucks network from 400 stores to 320, ceding its long-held lead to home-grown challenger Zuspresso Sdn Bhd, whose rapid expansion has reshaped Malaysia’s café landscape.
The branded coffee scene has also become more crowded with aggressive China-based entrants that typically compete on price.
Quays insists the global chain still has an edge among Malaysia’s expanding middle class and tourist market.
He believes Starbucks remains well-positioned to compete even against cheaper rivals.
The company is also looking further afield: Berjaya Food holds the rights to develop Starbucks in the Nordic region and plans to open a third outlet in Iceland after launching its first store there in May.
Beyond Starbucks — which contributes around 80 per cent of group revenue — Berjaya also operates Kenny Rogers Roasters worldwide and produces baked goods under the Paris Baguette brand in Malaysia and the Philippines. Berjaya Food is part of Berjaya Corp Bhd, the conglomerate founded by tycoon Tan Sri Vincent Tan.
Shares in Berjaya Food rose 2 per cent today but remain down about 25 per cent this year.
Analysts told Bloomberg the path back to pre-boycott performance is still uncertain.
Syifaa’ Mahsuri Ismail of Hong Leong Investment Bank warned the brand overhang from geopolitical tensions could linger even as footfall improves.
“The rising competition from fast expanding local and China-based coffee chains is exerting further pressure on the market,” she wrote in a note.
That competition, alongside shifting consumer sentiment, means Starbucks’ recovery — while real — may remain slow-brewing.
