Starbucks, the American coffee shop behemoth, insisted today that its international expansion plans remained intact after it announced the closure of more than two thirds of its stores in Australia.

The shutting of 61 of its 84 Australian shops follows hot on the heels of the company's decision to close about 600 company-owned outlets in the United States in an attempt to improve its performance.

But Howard Schultz, chairman, president and chief executive, insisted that the latest move was due to "business challenges unique to the Australian market" and did not have any relevance to any other countries.

Mr Schultz added: "There are no other international markets that need to be addressed in this manner."

A spokeswoman for Starbucks UK, which has 679 stores, said the group continued to view Britain as a growth market, with plans to open 100 outlets during the year to the end of September. It has opened 78 so far.

The group said that, after evaluating a number of ways of strengthening its Australian business, it had decided the closure of underperforming stores was the best option.

It said the business would be refocused on the three cities of Brisbane, Melbourne and Sydney and the surrounding areas, where 23 stores will be retained.

The decision, which will involve almost 700 job losses, will mean the removal of the increasingly ubiquitous Starbucks logo from secondary locations including Canberra, the Gold Coast, South Australia and Tasmania.

All 61 outlets will cease trading by the end of the week.

Some observers argued that the strong coffee culture brought to Australia by Italian immigrants had hampered the America group's efforts.

John Culver, president of Starbucks Asia Pacific, said: "One challenge has been that, as we've expanded into the remote locations, we haven't seen the foot traffic sustain those stores. I think what we've seen is that Australia has a very sophisticated coffee culture."

Andrew Mackay, vice-president of the Australian Coffee Traders Association, suggested that Starbucks ahd failed to grab the imagination of Australian consumers.

"I just think the whole system, the way they serve, just didn't appeal to the culture we have here," he said.

The company says it plans to open 975 stores outside America this year.

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