Starbucks is set to expand its UK shop estate by 100 new locations this year.
The announcement from the coffee shop giant came as it reported UK sales had leapt by more than a fifth in its latest financial year.
Total revenue hit £547.7m for the year ending 1 October 2023, marking a 21.9% increase from the prior term. Starbucks noted this strong, resilient revenue growth came despite “challenging economic headwinds in the UK”.
Operational highlights that contributed to the growth included investments in drive thru stores, delivery services, and digital channels such as mobile order and pay systems. In addition, improvements to the loyalty program saw a 100% increase in 90-day active membership, going from 600k to 1.2m.
The company ended the period with a total of 1,168 stores in the UK, compared to its estate of 1,066 shops in 2022. Of these, 354 were company-operated stores and 814 were run by licensees – maintaining an approximate 30/70 split from the previous year.
The UK remains Starbucks’ largest market in the EMEA region, which encompassed a total of 4,582 stores across 42 markets as of the year end.
Operating profit was said to have rebounded for the period, rising to £21.7m with margins increasing compared to last year. Among the reasons cited were improved operational leverage from a larger store portfolio, and stronger performance from licensed stores. The chain also welcomed increases in average basket value per customer, driven by purchases of a more favourable mix of items including bakery – Egg Bites and Cake Pops in particular performed strongly.
Starbucks also saw improvements in productivity within its labour force, having launched a new performance-linked bonus for store supervisors and baristas which allows so-called green apron partners to share in the company’s success on a sustainable basis.
“We are immensely proud to have celebrated our 25th anniversary in the UK and EMEA this year,” commented Duncan Moir, President Starbucks EMEA. “We are pleased to report another strong year of revenue growth, owing in large part to the dedication, hard-work and relentless pursuit of excellence that our brilliant team of partners continue to deliver.
“We are pleased to have met our new store opening commitments during the year, opening more than 100 new stores in the UK. While we continue to navigate challenging market conditions, we are excited to work alongside our partners to continue growing our footprint in the region,” Moir added.
Bakery chain Greggs, which has more than twice as many shops as Starbucks nationwide, announced similar growth figures (19.6%) and retail expansion plans (140-160 new stores) earlier this year.
Activity among coffee shop rivals, meanwhile, includes Caffè Nero opening its first drive-thru this Spring, and Costa following Starbucks lead in launching cafes within Sainsbury’s supermarkets.
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