Starbucks may re-launch in Australia with strong 7-Eleven connections

Posted by AFN Staff Writers on 28th May 2014

The Withers family behind 7-Eleven in Australia have acquired the Australian operating licence of Starbucks and control of the local operations of  the  global coffee giant.

However, the  Withers Group have intimated that the existing 24 Starbucks stores to be operated by the group, rather than franchisees, will remain independent from 7-Eleven stores.

“Our aim will be to make Starbucks the most successful coffee chain in Australia,” Withers Group chief executive Warren Wilmot said in a statement.

“Our intention is to capitalise on the skills of the broader Withers group of companies in successfully bringing an international brand to Australia, and adapting it to suit the local market.”

In July 2008, Australian Food News reported how Starbucks had cut back its local operations, closing 61 of its 85 stores and letting go of almost 700 staff.  Its business model at the time was not competitive against the strong Australian traditional coffee culture  of independent coffee shops or  rival operators such as McDonalds through its McCafe outlets and Gloria Jeans. These had developed a better understanding of the Australian shopping environment than the earlier Starbucks operation.

By contrast, the Withers-controlled Australian arm of 7-Eleven has grown to more than 600 stores across the country.  It has become Australia’s largest convenience and independent petrol retailer. 7-Eleven recently announced its plans for expansion into Western Australia.

In 2010, the Withers group’s 7-Eleven business scored a huge business coup by acquiring the retail operation of  almost 300 convenience stores from Mobil.

In 2012, the Australian 7-Eleven business expanded its marketing opportunities by partnering  Krispy Kreme  doughnuts.

Russell Withers with his sister Bev Warlow, with control over the Australian rights to 7-Eleven, have emerged from a family business that began with their grandfather, George Withers. It has been publicly reported that when their father, Reg Withers, joined the family company at the end of the World War, the business had two retail grocery stores in Melbourne (South Yarra and Richmond).

It is known that the family went into grocery bulk-buying and wholesaling and distribution, and later adapted from the United States the idea of branching into convenience stores and subsequently expanded into franchising. It appears that what the Withers family initially created as a defensive move into convenience stores out of a concern about the growing strength of the larger grocery retailers, developed into a stronger family-owned food and convenience retailing business.

The future is looking good with further growth to be expected  in the near term through geographic expansion of the Withers family businesses into the West and other parts of regional Australia,  and the benefits of leveraged expansion using strong international brands with wide market recognition.

It is  likely the Withers group will be marketing  additional franchise opportunities and branding partnerships with other business segments and partnerships  from within the group.

The prospect of aggregating further opportunistic strategic acquisitions will likely be made easier through the established branded business and franchising  infrastructure of the group.