Starbucks group profits tripled

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The Independent Online

Starbucks signalled a revival in fortunes today as it reported its second quarter of UK sales growth and a more than tripling of group profits.

The world's largest coffee chain saw UK sales rise 3.9 per cent in the final three months of 2009, helped by a 6 per cent surge in December.

Its recovery picked up pace across the group, with earnings leaping to 241.5 million US dollars (£149 million) in the quarter - more than three times the 64.3 million dollars (£39.7 million) seen a year earlier at the height of the global recession.

Starbucks said more caffeine lovers were visiting its shops and spending more money than they did during the group's first quarter.

The Seattle-based company is opening stores again across the US, after a tough past couple of years that saw it shut swathes of outlets and lay off workers to cut its costs.

It also pledged a focus on customer service in its non-US operations after admitting this got lost amid a rapid expansion programme.

Starbucks now has a record number of customers visiting UK stores - at more than two million a week.

The group said it saw Starbucks coffee becoming "an extension of people's lives" in the UK, as it hopes the coffee shop culture will become a tradition to rival the English pub.

Its first quarter sales surge marked its sixth straight month of like-for-like UK growth.

But it has been a tough recession for Starbucks, with consumers reining in disposable spend and stiff competition from Whitbread-owned rival chain Costa.

Starbucks has closed a number of stores in the UK, as part of a recent programme to shed some 900 shops worldwide.

The collapse of Borders bookshop chain - in which Starbucks had a chain of concessions - also left it with 36 fewer outlets.

It now has 661 stores across the UK, compared with 712 the previous quarter.

But Starbucks intends to rebuild its UK store base over 2010 as part of plans to add another 200 sites outside the US and around 100 new locations in the US.

Darcy Willson-Rymer, UK managing director, said: "I'm pleased that the big investment we are making in the UK business is finding favour with customers, but we do expect 2010 to remain challenging and we're taking nothing for granted."