Starbucks blames fall in consumer confidence for 61% UK profit slump

The world’s biggest coffee chain’s pre-tax profits slumped from £34.2m to £13.4m in the year to 2 October 2016

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Coffee giant Starbucks said Brexit’s impact on consumer confidence, as well as a drop in the number of people visiting the high street, is to blame for a plunge in UK profits.

The world’s biggest coffee chain’s pre-tax profits slumped nearly 61 per cent from £34.2m to £13.4m in the year to 2 October 2016. Its turnover declined from £405.6m to £379.9m during the period.

According to accounts filed at Companies House, the group said it remains “cautious” on the outlook going into 2017 due to “persistent economic and geopolitical headwinds including slowing economic growth, the impact of Brexit and ongoing security concerns affecting customers.”

Growth in like-for-like sales, which does not include revenue from new stores opened during the period, slowed to 1 per cent from a rate of 3.8 per cent in the previous year.

“Whilst there are undoubted challenges presented by a more cautious consumer environment, lower high street footfall, and adverse currency impacts, we are investing significantly to drive innovation in our food and coffee offering, and are greatly encouraged by our customers’ response,” said Martin Brok, president of Starbucks for Europe, the Middle East and Africa (EMEA) region.

“The UK remains one of the most important EMEA markets for us and we will continue to grow where our customers want to find us,” he added.

The company’s corporate tax bill also went down from £8.4m to £6.7m during the period.

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