Starbucks gets its buzz back as City sales soar

Rise in popularity in US copied in UK, where City outlets help revenues jump 5 per cent

The rehabilitation of the US coffee chain Starbucks gathered pace yesterday when it disclosed forecast-beating profits for the past three months. The company said that cost cutting and a spike in popularity in America had helped it to a better-than-expected profit of $217m (£141m) for the quarter ending 28 March, compared with just $25m in the same period last year.

The figures were boosted by an increase in customer numbers, the first rise for 13 quarters. Revenues jumped 9 per cent to $2.53bn, up from $2.33bn a year ago.

"Starbucks' second-quarter results demonstrate the impact of innovation and the success of our efforts to dramatically transform our business over the last two years," Howard Schultz, the founder of Starbucks who returned as chief executive in 2008, said.

The results demonstrate a remarkable turnaround for the group, which as recently as two years ago was struggling after overly ambitious expansion plans misfired.

Speaking in London three months ago, as Starbucks reported its then best results for two years, Mr Schultz said: "We have now come through what was a cataclysmic and brutal economic crisis to deliver a record quarter. From our point of view, continued innovation, the successful enhancement of the consumer experience and a transformed, more-efficient cost structure have brought Starbucks to a significant milestone – a return to profitable growth."

Part of the improvement has come as a result of the ubiquitous chain shedding thousands of jobs and closing hundreds of underperforming coffee shops.

Starbucks has also enjoyed a strong second-quarter performance in the UK, saying that revenues in Britain and Ireland were up by 5 per cent on the same period last year. The group said that it had seen particularly good trading in its City and Canary Wharf outlets in London, underscoring the theory that a recovery in the financial services jobs market is well under way.

"At the start of the recession these branches were hard hit, but they have come back strongly – they are now part of the strongest region of the UK," said Darcy Wilson-Rymer, the managing director of Starbucks UK.

A spokesman said that the group would open 50 new shops in the UK this year, although the overall number will remain broadly flat after the group lost 35 outlets when the Borders chain of bookshops closed last year.

During the past three months, the company has launched its range of Via instant coffee in the UK, which it is selling throughout its coffee shops and other outlets. Mr Wilson-Rymer said that the company has also signed a deal with Thomas Cook airlines to provide Via on its flights. The UK arm of the business already had an agreement with Welcome Break to supply Starbucks coffee at motorway service stations.

"Customers are still looking for value, and they told us that they wanted to be rewarded for loyalty," said Mr Wilson-Rymer. "Our response is now paying off. Customers are also looking for better coffee at home, at work or on holiday, which is why Starbucks Via represents such a big opportunity."

This is not the first time the group has made an assertion about the quality of the Via range.

In January the group was forced to withdraw a claim that the Food Standards Agency (FSA) had barred Starbucks from describing Via as instant coffee because, Starbucks said, the quality of the coffee was too high. The claim was made repeatedly during a meeting with reporters that was chaired by Mr Schultz.

The FSA said that it had given no such advice, adding that "we have not spoken to Starbucks at all about this product". A press officer for Starbucks later admitted that the claim was false.

"There is actually no issue with the FSA regarding Via, or its quality," he said.

PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Laura Trott with her gold
Commonwealth Games
Arts and Entertainment
Gal Gadot as Wonder Woman
film
News
Bryan had a bracelet given to him by his late father stolen during the raid
people
Sport
France striker Loic Remy
sportThe QPR striker flew to Boston earlier in the week to complete deal
Extras
indybestSpice up your knife with our selection of delicious toppings
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Training/Learning and Development Coordinator -London

£28000 - £32000 per annum: Ashdown Group: Training/Learning and Development Co...

Training Programme Manager (Learning and Development)-London

£28000 - £32000 per annum + benefits: Ashdown Group: Training Programme Manage...

.NET Software Developer (.NET, C#, ASP.NET, front-end)

£30000 - £45000 per annum: Harrington Starr: A Global Financial Service Organi...

C# Web developer (C#,MVC,ASP.NET,SQL)

£30000 - £40000 per annum + Bonus+Benefits+Package: Harrington Starr: C# Web d...

Day In a Page

A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on
It's the best of British art... but not all is on display

It's the best of British art... but not all is on display

Voted for by the British public, the artworks on Art Everywhere posters may be the only place where they can be seen
Critic claims 'I was the inspiration for Blanche DuBois'

Critic claims 'I was the inspiration for Blanche DuBois'

Blanche Marvin reveals how Tennessee Williams used her name and an off-the-cuff remark to create an iconic character
Sometimes it's hard to be a literary novelist

Sometimes it's hard to be a literary novelist

Websites offering your ebooks for nothing is only the latest disrespect the modern writer is subjected to, says DJ Taylor
Edinburgh Fringe 2014: The comedy highlights, from Bridget Christie to Jack Dee

Edinburgh Fringe 2014

The comedy highlights, from Bridget Christie to Jack Dee
Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

Dame Jenny Abramsky: 'We have to rethink. If not, museums and parks will close'

The woman stepping down as chair of the Heritage Lottery Fund is worried