Starbucks UK reports systemwide sales past £1bn

Starbucks UK has reported it surpassed £1bn in system-wide sales for the year ending 1 October 2023

Starbucks UK has brewed up a record-breaking achievement, surpassing £1 billion in systemwide sales for the first time for the year ending on October 1, 2023.

Despite the economic challenges witnessed throughout 2023, Starbucks UK reported positive like-for-like sales growth across stores operational for over a year. The company managed to bolster its operating margin amidst these headwinds, a testament to its strategic manoeuvres in a turbulent market.

This feat was underscored by a strong emphasis on digitalisation and technology which bolstered its loyalty program, Starbucks Rewards, resulting in a surge in active members. 

The company's success story was further propelled by prudent menu management and pricing strategies, reflecting its agility in responding to evolving consumer preferences and economic conditions. Notably, the popularity of cold beverages such as the Refresha CRl Drink and Iced Shaken Espresso, alongside food items like egg bites and cake pops, contributed to an uptick in the average customer basket value. Strategic price adjustments were also implemented in line with increased input costs, ensuring the company's profitability amid market fluctuations.

Financial figures

Financially, Starbucks UK witnessed a remarkable 22% surge in turnover, reaching £547,672,000 compared to £449,257,000 the previous year. Of this, £336,688,000 stemmed from company-operated stores, £207,848,000 from licensing and franchising, and £3,136,000 from store value card breakage.

Pre-tax profit soared to £16,870,000 from £10,396,000, with corporation tax amounting to £7.2 million, reflecting an effective tax rate of 42.4%. This robust financial performance allowed Starbucks UK to reinvest in its expansion plans, aiming to add one hundred new sites for the second consecutive year while enhancing productivity within its labour force.

Moreover, operational profit surged to £21.7 million from £12.6 million, with the operating margin expanding to 4.0% from 2.8% in the previous year. This boost was attributed to operational efficiencies derived from a larger store portfolio, the success of its cold beverage platform, and an improvement in average basket value per customer.

Looking ahead, Starbucks UK is poised to sustain its growth trajectory, having introduced a new performance-linked bonus scheme for store supervisors and baristas, fostering a culture of shared success and incentivising its frontline staff. Notably, no dividend was paid out, signalling the company's focus on reinvestment for future expansion and innovation.

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