Starbucks UK revenue soars 35% in FY21
Profit before tax hit £13.3m, up from a £41m loss reported in FY20, despite the fact the first half of the year was heavily impacted by ongoing lockdowns
Starbucks has announced that UK revenues rose by 35% to £328m in the full-year ending 3 October 2021, largely driven by the recovery of sales in both company owned stores and franchised stores following the pandemic.
Profit before tax hit £13.3m, up from a £41m loss reported in FY20, despite the fact the first half of the year was heavily impacted by ongoing lockdowns and other restrictions on trading.
Similarly, EMEA revenues soared by 41% to $237m (£180m), while gross profit hit $166m (£126m), up from $81m (£62m) in FY20.
The coffee chain giant said it has seen the benefits of investment in new store formats and sales channels, with takeaway, delivery and Drive Thru sales all making “sharply improved contributions” to the business.
During the period, in response to government guidelines, Starbucks moved its UK stores to a reduced operating model from November 2020 to March 2021, and with indoor cafe seating restricted, Starbucks operated primarily through its Takeaway, Delivery and Drive Thru channels.
As restrictions eased last March, it saw strong demand for its products as it moved back to a standard operating model. It said there was particularly strong footfall recovery in suburban locations and stores in retail parks. While Drive Thru and delivery have performed well overall, its office, travel and inner-city locations have all been much slower to recover, however.
Starbucks also warned that the operating environment remains “extremely challenging”. It noted that inflation is having an impact across the business, with almost all input prices now rising. In addition, it warned that supply chain disruptions and labour shortages have also been an issue over the period.
Duncan Moir, president Starbucks Europe, Middle East and Africa, said: “We have had a difficult operating environment with the first half of the year continuing to be impacted by Covid-19 restrictions. However, our trading position improved as restrictions were eased and we have since experienced a sharp bounce-back in trading.
“The pandemic accelerated customer trends towards convenience and we are continuing to see strong demand in Drive Thru, on-the-go formats and delivery platforms.”
He added: “Our investment in technology has been key in making sure we are well placed for these changing dynamics and we have also adapted our operating model to ensure that we can be more flexible and agile. We’re optimistic that these actions position Starbucks for long term growth both in the UK and EMEA.”
The UK is the largest market for Starbucks in EMEA, and at the year end, Starbucks had a total of 1,000 stores in the UK, of which 297 were company-owned and 703 were run by licensees.
