Starbucks, the American coffee shop behemoth, insisted that its international expansion plans remained intact after it announced that it was shutting more than two-thirds of its Australian stores.

The closure of 61 of its 84 Australian shops comes after the company's decision to shut about 600 company-owned outlets in the United States in an attempt to improve performance.

Howard Schultz, the 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 other countries.

The company also unveiled executive changes, before today's third-quarter earnings announcement. Mr Schultz said that he had promoted Martin Coles, Starbucks's chief operating officer, to president, a position at present occupied by himself.

In an attempt to boost customer service, a key area of complaint among Starbucks regulars, Michelle Gass, senior vice-president, will head a new marketing business. Jim Alling, appointed head of Starbucks Coffee International last year, is leaving the company.

Starbucks UK, which has 679 stores, said that the group continued to view Britain as a growth market, with plans to open 100 outlets during the year to September 30. It has opened 78 so far.

The group said that, after evaluating ways of strengthening its Australian business, it had decided that closing underperforming stores was the best option. It said that the business would be refocused on Brisbane, Melbourne and Sydney and the surrounding areas, where 23 stores will be retained.

The closures will involve 700 job losses. Some observers argued that the coffee culture brought to Australia by Italian immigrants had hampered the group's efforts.

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