Starbucks comes under 7-Eleven control in Australia

The owners of the 7-Eleven chain in Australia have taken control of coffee giant Starbucks' struggling local operations in a bid to turn around its fortunes, the company said on Wednesday.

While the iconic US brand dominates in some parts of the world, it has failed to gain a foothold in a long robust Australian coffee market and only has 24 stores.

The Withers Group, which has built its convenience store operations to include 600 outlets, has now acquired the local Starbucks licence from its US parent for an undisclosed sum.

"Our aim will be to make Starbucks the most successful coffee chain in Australia," Withers Group chief executive Warren Wilmot told reporters.

"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."

Achieving successes with the Starbucks brand on the scale of what has been achieved with 7-Eleven will be a major challenge given the coffee chain has struggled since opening its first store in Sydney in 2000.

After years of losing money, it closed about 60 shops in 2008 and sacked almost 700 staff, unable to compete with a sophisticated coffee culture where customers already knew the difference between a macchiato and an affogato.

A wave of post-war immigrants from Turkey, Greece and particularly Italy means that for decades Australians had been enjoying the "coffee experience" Starbucks popularised in the United States.

The Withers Group, run by one of Australia's wealthiest families, indicated that Starbucks stores would now be operated by the group, rather than franchisees, and that they would remain independent from 7-Eleven.

"It's really going to bring the future potential of Starbucks to life," Starbucks China and Asia Pacific president, Jeff Hansberry, told Fairfax Media.