Starbucks Experienced Loss In The UK During Year To September 2020
Starbucks experienced a £41 million loss in the UK during the year to September of 2020. Statistics And Related Information As reported by The Irish News, the company's latest results reveal that it...
Starbucks experienced a £41 million loss in the UK during the year to September of 2020.
Statistics And Related Information
As reported by The Irish News, the company's latest results reveal that its revenues decreased by 32.7% during the year to September of 2020 due to COVID-19-related restrictions being in place for much of the year.
However, Starbucks reportedly continued to pay its employees in full and did not avail of any government furlough schemes for its non-franchised stores, which account for approximately 30% of UK Starbucks outlets.
Last summer, UK city centre outlets reportedly traded at 34% of the levels that were recorded for the previous year, and trading increased to 56% of the previous year’s levels by September.
UK Starbucks bosses reportedly continued to pay rent during the pandemic period that is covered by the results, but they did enter into lease negotiations to agree reductions where possible.
They also reportedly invested heavily in delivery platforms to take advantage of the home delivery market.
Starbucks reportedly did not make any redundancies during the period and has subsequently hired 400 new employees in the UK.
Its financial position was reportedly also aided by the waiving of royalties to its parent company, but Starbucks took a £1.8 million hit from the permanent closure of three outlets and a further £10.4 million hit from 35 underperforming outlets.
Starbucks’ sales across its European, Middle East and African estate reportedly decreased by 32% overall to $168 million, with 86% of outlets being closed during the peak of the pandemic in April of last year.
The Middle East and Turkey was reportedly particularly strong, with 167 new stores opening and the rollout of drive-through boosting sales by 24%, but lockdown measures caused a 71% hit to Starbucks’ European revenues.
The Irish News quotes Starbucks as saying, "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).
"The region continues to be supported by Starbucks Corporation, given the strategic importance of the UK market to trial new initiatives in coffee, food service and point of sale.
"The business expects a continued shift of consumer behaviour which will drive further evolution of its stores, locations and offerings in the future."
According to The Irish Times, Starbucks' European business paid $183 million in dividends to its US parent company during the year to September of 2020; Starbucks’ pre-tax profit decreased by close to 40% to $104 million during the period; in the UK, Starbucks experienced suffered a £41 million pre-tax loss; its UK revenues decreased by a third to £243.3 million; and the group paid $3.1 million tax from its European businesses but also paid a $183 dividend to its US parent company.
Also according to The Irish Times, Starbucks said that the dividend was not declared as paid out in its accounts because it is not required under standard accounting practices.
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