Starbucks claims recovery on track despite losses

14 July, 2010

Starbucks insists it is on the road to recovery in the UK despite the latest dismal results. Figures filed at Companies House for the 12 months to 27 September show it made a loss after taxation of £52.1m compared with a loss of £46.9m the previous year.

The loss stands in contrast to the bullish performance of Costa, which posted a 60% increase in operating profit in 2009/10.

To compund matters, Starbucks failed to get the Advertising Standards Authority to pull adverts from its rival earlier this year that boasted ‘Starbucks drinkers prefer Costa’ and ‘Seven out of 10 coffee lovers prefer Costa’.

Starbucks' financial report said: “Management took rigorous action to improve the customer experience and to provide customers with greater value for money.”

These included the introduction of 100% certified Fairtrade espresso in all UK stores and a customer reward programme. It added: “There was evidence that consumers responded to these initiatives and the year ended with record numbers of consumers in stores.”

Anya Gascoine-Marco, senior project manager at Allegra Strategies, said the figures were nothing to be unduly alarmed about and that turnover was fine; comparative store sales rose by 3.9% in the quarter to 27 December 2009, with sales in December alone up 6%.

She added: “Starbucks have cut prices and have reviewed their estate – the Borders stores were the worst performing and didn’t close until December. They are on a journey to getting back to breaking even.”

At the start of the year, Starbucks announced plans to open 29 motorway services outlet in the UK over the next 16 months – replacing Welcome Break’s Coffee Primo own-brand – as it explored new avenues of trading.

The chain has also opened concessions in New Look clothing stores, following the closure of its 36 Starbucks concessions in Borders, which went into administration before Christmas.





My Account

Spotlight

Most read

Social