Starbucks warns of 'tougher' UK trading climate

Starbucks UK has become the latest big high-street chain to warn of a slowdown in consumer spending, as the coffee shop giant unveiled the first shop with its new look and logo in London yesterday.

Darcy Willson-Rymer, the managing director of Starbucks UK & Ireland, said there had been fewer people out shopping on the high street since early January, which had resulted in fewer customers coming into its 736 shops. "We have seen a slight slowdown and for all retailers it is a tougher place out there."

He added that its regular customers were visiting and buying as much as usual, but the more "occasional" patron is coming in less often. "People are having to be careful about how and when they spend their money."

His comments chime with those of other retailers, such as Primark and John Lewis, that have cited more subdued consumer spending since the end of the early January sales. The British Retail Consortium this week reported a fall of 0.4 per cent in underlying sales in February, the weakest data since May 2009.

However, Mr Willson-Rymer said that Starbucks was continuing to deliver like-for-like sales increases in the UK, and he expects it to continue growing this year.

In response to the tougher environment, Starbucks is offering holders of its prepay card free Wi-Fi access and additional flavourings, such as vanilla, as well as filter coffee for £1.

Starbucks UK yesterday opened its latest new concept shop in Knightsbridge, opposite the Harrods department store. The shop is the first to display its new logo, which keeps the "Starbucks siren" but drops the corporate letters, alongside its lighter, cream-coloured mugs.

The store's distinct look also features concrete floors, breeze-block walls and book shelves. Mr Willson-Rymer said: "We have continued to evolve the brand, and no two stores need to necessarily look the same."

Marking the coffee giant's 40th birthday, Starbucks also unveiled its new-look stores and logo in Paris, New York, Beijing and Seattle, its birthplace. After suffering a slowdown in the recession, Starbucks' founder Howard Schultz returned as chief executive executive in 2008, and decided that its brand had become too commoditised.

In the UK, Starbucks set out to tailor each store's look more to its local neighbourhood, such as bigger tables to cater for business meetings at its first redesigned shop in central London in November 2009.

Starbucks refurbished 100 UK shops last year, and will do a similar amount this year, although so far it has only about 20 of the new concept stores. The new stores deliver a sales increase of between 5 per cent and 20 per cent, said Mr Willson-Rymer.

He said the average British person drinks 58 cups of coffee a month – eight of them at coffee shops – and they are "becoming more discerning and demanding higher quality".

Starbucks UK launched its Via instant coffee capsules in March 2010. It sold 9 million servings in the first six months, including in the grocers Tesco, Sainsbury's and Waitrose, as well as on easyJet flights.

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