Starbucks failed to expand in South Africa because it was too expensive. People can't afford to drink.

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Starbucks stores in South Africa have been suspended as operating costs are hard to keep down and prices are too high for many people to drink. Starbucks imports all raw materials in South Africa, while maintaining standards such as being located in the main business district and providing free WiFi on the highway, which is expensive.

High operating costs and tight consumer budgets have made American coffee giant Starbucks need caffeine stimulation in South Africa. Starbucks has abandoned ambitious expansion plans in South Africa, even though it is seen as a foothold on the continent.

When Starbucks opened its first store in Rosbank, Johannesburg, in April 2016, it looked set to sweep South Africa. At that time, large crowds lined up for hours to taste their famous coffee and enjoy the coffee experience.

Taste Holdings, a local licensee, has opened 12 stores in Johannesburg, Pretoria and Delban and had hoped to increase the number to 45 by 2020, with a maximum target of 150 across the country.

But the company has now ruled out plans to further expand its store in South Africa in an effort to control operating costs and debt.

Taste said in its latest financial report that operating costs in the food division had increased by 7 per cent in the six months to August, mainly due to "the doubling of Starbucks' operating costs compared with the same period last year as a result of the addition of eight new stores".

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