Taste Holdings sold its 13 Starbucks stores for $464,000 — less than one flagship cost

The first Starbucks in sub-Saharan Africa opened in 2016 through a partnership between Starbucks and South Africa's Taste Holdings, which also ran the country's Domino's Pizza franchises. Taste presented investors with a plan to expand Starbucks to between 150 and 200 locations.

In November 2018, after opening 12 stores, Taste paused the rollout. A year later it said it could not secure the capital investment the expansion required, given the current structure of the business and existing market conditions, and announced it would exit the food business entirely to focus on its luxury retail brands in jewelry and watches.

The economics never closed: at 15–25% more expensive than similar items at local chains, Starbucks was out of reach for many South Africans in a country where, per World Bank figures cited by Vestact portfolio manager Michael Treherne, only about 20% of the population was middle class from 2008 to 2015. On 1 November 2019 Taste sold all 13 stores to a consortium for 7 million rand — about $464,000, less than the cost to build its flagship location.

All 13 stores sold for R7 million (about $464,000) on 1 November 2019 — less than the cost to build the flagship location.

Premium pricing in a small middle-class market capped the addressable customer base before the rollout ever scaled.

Slow economic growth squeezed consumer pockets, so the 15–25% price gap against local chains outweighed the brand's pull.

A 150–200 store plan required capital the existing business structure and market conditions could not supply.

Taste chose to abandon the entire food division rather than keep funding a sub-scale franchise next to its luxury retail returns.

A premium import needs a premium customer base: if only a fifth of the market can afford you, a 150-store plan is arithmetic, not ambition.

The consortium took over Starbucks' South African footprint on 1 November 2019. Taste Holdings exited food entirely, including its Domino's Pizza franchises in South Africa, and refocused on luxury retail. Starbucks' sub-Saharan debut thus ended three years after it began, sold for less than the cost of building its own flagship store.