I didn't know this. They have less than 50 stores in a highly developed country. That is shocking. Googling a little bit tells me the reason:

    Starbucks wasn't cost competitive in Australia, with drinks often costing significantly more than local coffee shops.

How is this possible? And why not in other highly developed countries?

Is the margin for Australian local coffee shops very low? I assume yes.

That absolutely wasn't the issue. Starbucks cost pretty much the same as everyone else. The coffee was dreadful. We have a massive coffee culture in Australia and in general good quality coffee can be found in most urban centres.

I have been told that what most Americans call good coffee we find undrinkable.

It wasn’t the cost. It was that the coffee sucks. Australia has a huge coffee snob culture and Starbucks does not make the grade.

Well, there is also that its competitor (also from the US but failed there) Gloria Jeans happened to fill its niche. The fact that each chain won in one country and failed in another seems to suggest it is just luck.

Gloria Jeans was financed by Hillsong, and though their coffee was pretty awful, it was still better than Starbucks.