Brexit and terrorism fears hurting demand in UK, says Starbucks
Profit for coffee giant fell 74% in year to start of October as efforts made to gain customers
Starbucks says it’s cautious on the outlook going into 2017 due to economic and geopolitical headwinds. Photograph: Alan Betson
Starbucks, the coffee-shop giant that reined in its revenue forecast earlier this year, said concerns over Brexit and terrorism may be hurting demand in the UK.
“The company is cautious on the outlook going into 2017 due to persistent economic and geopolitical headwinds including slowing economic growth, the impact of Brexit and ongoing security concerns affecting consumer confidence,” Starbucks said in documents filed with the UK business registry Companies House on Wednesday.
Profit in the UK tumbled 74 per cent to £6.7 million (€7.9 million) in the year ended October 2nd, the Seattle-based company said in the documents. Customer traffic was “noticeably down” across stores in the country, it said.
The world’s biggest coffee company has been trying to improve sales with new technology and a loyalty programme that locks in customers. UK sales have been hindered by the Brexit vote to leave the European Union, and by recent terror attacks across Europe. Last year, Starbucks blamed attacks in Paris for hurting European results. In the US, the company is facing pressure as its mobile-order-ahead application causes back-ups at the pick-up counter.
Starbucks said its UK business was “investing significantly” in lighter food options including pots of fresh fruit, salads and wraps. It was also remodelling stores to “reflect changing customer demands”, it said. – (Bloomberg)