Pandemic pushes Starbucks UK arm deep into the red but headcount rises

Starbucks has suffered a £41 million loss at its UK business as the pandemic took its toll on the coffee shop giant.

Companies House accounts show that revenues in the year to September 2020 fell to £243m, down 32.7 per cent due to the Covid restrictions imposed during much of the year.

But despite the pandemic, the UK arm of the US coffee chain continued to pay its staff in full and did not take any government furlough money for its non-franchised stores, which account for around 30 per cent of all sites in the UK.

There was some recovery for the company when stores were allowed to reopen in the summer, with UK city centres trading at 34 per cent of levels the previous year, rising to 56 per cent by September 2020.

There was some recovery for coffee giant Starbucks when stores were allowed to reopen last summer. Picture: Philip Toscano/PA

Starbucks did not make any redundancies during the period and has subsequently hired 400 staff across the UK.

Its financial position was also helped by the waiving of royalties to its parent company, although the coffee chain took a £1.8m hit from permanently closing three stores and a further £10.4m charge against 35 underperforming ones.

Across its European, Middle East and African estate, the business revealed sales fell 32 per cent overall to $168 million (£121m), with 86 per cent of stores closed during the peak of the pandemic in April 2020.

Looking forward, the firm noted: “Starbucks is continuing to assess and respond to government mandated rules on social distancing and operational practising, navigating local and national lockdown rules in the UK and EMEA (Europe, Middle East and Africa).”

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