The US coffee chain achieved its goal of opening 100 new UK stores last year and will continue to focus on drive-thru and smaller format stores to drive growth
A drive-thru Starbucks store in York, UK, operated by franchisee 23.5 Degrees | Photo credit: 23.5 Degrees
Starbucks has announced plans to open 100 more UK stores as it seeks to build upon strong outlet and sales growth last year.
The US coffee chain achieved a target set in March 2023 to open 100 UK stores during its financial year ended 1 October 2023. Following significant investment in its drive-thru network, Starbucks ended the period with 1,168 UK stores and has since expanded to 1,260 outlets across the country.
In a press release, Starbucks said store footfall in the UK continues to be negatively impacted by the cost-of-living crisis. The coffee chain’s outlet growth this year will continue to focus on key drive-thru and high-footfall city centre locations. Starbucks currently operates 340 UK drive-thru sites.
In March 2024, Starbucks appointed commercial and real estate specialist Darren King as UK Store Development Director to lead its acquisition, design and construction departments.
“We are pleased to have met our new store opening commitments during the year, opening more than 100 new stores in the UK. While we continue to navigate challenging market conditions, we are excited to work alongside our partners to continue growing our footprint in the region,” said Duncan Moir, President Europe, Middle East and Africa, Starbucks.
Starbucks achieved 22% year-on-year sales growth in the UK in the 12 months ending 1 October 2023 to reach £547.7m ($693m), with gross profit rising 15% to £149m ($188.5m).
The Seattle-based coffee chain also reported strong loyalty membership growth across the UK during the period, culminating in 1.2 million members, as well as a rise in cold beverage orders.
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The UK is Starbucks’ largest market in the Europe, Middle East and Africa (EMEA) region. The coffee chain posted 31% EMEA sales growth last year to $425.4m, driven by new store openings. EMEA gross profit increased 37% to $321.7m while operating profit grew 72% to $125.5m.
Starbucks’ EMEA store expansion this year is expected to be led by licensing partners Alshaya Group and Alsea.
In October 2023, Alshaya Group CEO John Hadden said the business planned to open 250 net Starbucks outlets annually, ‘aiming for 3,000 outlets in the next five years from the current 2,000’. Alshaya Group currently operates Starbucks stores across Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Turkey and the UAE.
Mexico City-based Alsea currently operates 576 Starbucks stores across France, Spain, The Netherlands, Belgium, Portugal and Luxembourg. In March 2024, the quick-service hospitality group earmarked 25% of a planned ₱6bn ($356m) investment in its portfolio of brands for outlet expansion in Europe.