Starbucks files UK and EMEA accounts for the fiscal year ended October 2023

Starbucks continued its growth within the UK and EMEA, posting strong revenue growth in FY23

Starbucks UK registered EMEA business and UK Coffee Company today filed accounts for the financial year ending 1 October 2023.

Starbucks UK Coffee Company (in GBP):

• Total revenue: £547.7m, up 21.9% on last year as the Company continued its growth within the UK
• Gross profit: £149.0m (FY22: £129.1m)
• Operating profit: £21.7m (FY22: £12.6m)
• Profit before tax: £16.9m (FY22: £10.4m)
• Total UK corporation tax charge: £7.2m (FY22: £4.6m)

Starbucks EMEA (in USD):

• Total revenue: $425.4m, up 31.3% on last year driven from new store openings and strong underlying performance across the EMEA markets
• Gross profit: $321.7m (FY22: $234.9m)
• Operating profit: $125.5 (FY22: $72.9m)
• Profit before tax: $141.1m(FY22: $75.9m)
• Total UK corporation tax charge: $36.4m (FY22: $19.5m)

UK FY23 Operational highlights:

• Strong, resilient revenue growth continued, even with challenging economic headwinds in the UK.
• Investment in Drive Thru stores and digital channels such as mobile order and pay systems, delivery services, and improvements to the loyalty program which saw a 100% increase in 90-day active membership going from 600k to 1.2m, has continued to go from strength to strength.
• The Company saw further strength in the performance of its Summer Campaigns, with cold beverages continuing to see increased consumer appeal.
• The Company also fulfilled the commitment made last year to invest in growth, opening more than 100 stores in the UK.
• As part of its long-term strategy, the Company is also committed to maintaining its status as an employer of choice:
  • Starbucks launched a new performance-linked bonus for store supervisors and baristas which allows green apron partners to share in the Company’s success on a sustainable basis.
  • Further incentives and benefits were provided in the year, including but not limited to salary increases, and a green apron discount.
• The Company plans to open an additional 100 new stores in FY24 in the UK.

Duncan Moir, President Starbucks Europe, Middle East and Africa, commented:

“We are immensely proud to have celebrated our 25^th anniversary in the UK and EMEA this year. We are pleased to report another strong year of revenue growth, owing in large part to the dedication, hard-work and relentless pursuit of excellence that our brilliant team of partners continue to deliver.

“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.”

UK Overview

The UK remains the Company’s largest market in EMEA. UK operations are captured in the accounts of Starbucks UK Coffee Company.

The Company ended the year with a total of 1,168 stores in the UK (2022: 1066 stores). Of these, 354 were company-operated stores and 814 were run by licensees – a 30/70 split, approximately which is flat on last year.

Despite the challenging economic headwinds facing the UK, Starbucks continues to experience strong demand for its products and delivered strong sales growth with revenues increasing 21.9% to £547.7m in the period.

Operating profit rebounded for the period, rising to £21.7m with margins increasing compared to last year. The was due to improved operational leverage from a larger store portfolio, stronger performance from licensed stores which is margin positive, the outperformance in our cold beverage platform, improvements in average basket value per customer which was driven by customers buying a more favourable mix of items and improvements in productivity within our labour force during the period.

UK Market Trends

We’ve continued to see growth in the UK coffee market in spite of the macroeconomic conditions that have hit the UK in the financial year such as the cost-of-living crisis, which continues to dampen high street and city location footfall.

The Company continues to navigate, and respond to, changing consumer demands by ensuring that it actively manages its menu offerings. The value of an average customer basket increased year on year, driven by the increase in popularity for our cold beverage platform with drinks like the Refresha, Iced Shaken Espresso and Clotted Cream Cold Fudge Brew. Growth was also seen in customers adding food to their purchases with items like Egg Bites and Cake Pops performing strongly.

We experienced the inflationary pressures that were felt throughout the coffee industry with notable impacts on dairy and coffee commodity prices in FY23 that contributed to rising input costs into the Company. Overall costs were also higher as a result of wage increases during the year. Selected strategic price increases were taken in line with these rising input costs into the business.

Investment in digitalisation and technology has improved the Company’s loyalty program and led to growth in the programme’s 90-day active members, going from 600k to 1.2m by the year end. This focus has improved customer convenience and fostered increased engagement and loyalty which has translated into higher frequency of visits. The Company continues to build upon this in 2024 through the rollout of further digital initiatives.

The Company continued its expansion strategy by opening over 100 new stores in the UK demonstrating a commitment to growth despite economic challenges. We now have 1168 stores in the UK (FY22: 1066).

New store openings were targeted in key Drive Thru and city locations with high traffic and footfall counts. In total, the Company has 335 Drive Thru stores at the end of FY23 (2022: 285), of which 39 are Company operated stores, and 296 are licensed/franchised stores.

In FY23, the Company progressed its strategy to become an employer of choice, continually reviewing its pay and benefits structures to remain an attractive employer. Heading into FY24, we believe we are in a strong position to attract and retain talent for our stores; further incentives and benefits were provided in the year, including but not limited to salary increases, green apron discount and green apron bonus.

Starbucks also launched a new bonus scheme for store supervisors and baristas which allows green apron partners to share in the Company’s success on a sustainable basis. This bonus scheme will be directly linked to performance.

As part of our long-term strategy, the Company plans to open an additional 100 stores in the UK in FY24. Company operated growth in FY24 will focus on new store format innovation and high traffic count locations across the UK.

UK Corporation Tax

The Company reported a UK corporation tax charge of £7.2m (2022: £4.6M).

EMEA Overview

Starbucks EMEA Limited is the main reporting entity for all Starbucks activities in EMEA – excluding the UK business, which is reported separately as outlined above.

At the year end, there were 4,582 stores in 42 markets across Europe, the Middle East and Africa (EMEA) (2022: 4176 stores).

Starbucks continues to pursue its core strategy of a mostly licensed and franchised operating model in the EMEA region, meaning most of its revenues come from royalty payments. Revenue increased by 31.3% in the period to $425.4m (2022: $324.0M), driven by new store openings and strong underlying performance across the EMEA markets, including continued rollout of digital services.

This was partially offset by an increase in administrative costs due to additional activity supporting expansion across EMEA such as marketing, technology and digital support costs. Resultantly, operating profit increased during the year to $125.5M (2022: $72.9M).

EMEA Market Trends

The continued rollout of digital platforms to licensees and investment in technology continued to be drivers of growth during the period, improving the Starbucks experience for customers. This includes improvements to the Starbucks website, enabling mobile order and pay, delivery, improvement to the loyalty program which saw 166% increase in 90-day active membership over the course of the year.

Supporting our overall strategy, the Company has seen continued store growth during the year. We will continue to open new stores and support growth in the region.

EMEA corporation tax

Starbucks EMEA Limited reported a UK corporation tax charge of $36.4m for the year, compared to $19.5m for the same period last year. The payment increased owing to the improved trading performance and profitability of the business.

Profit after tax for the period was $104.7M (2022: $56.4M). This consists of an operating profit of $125.5m (2022: $72.9m) from its operating and other activities and a UK corporation tax charge of $36.4M (2022: $19.5M).

The net asset position of the Company was $1,286.7M (2022: $2,041.2M). The decrease in net assets is driven by the distribution of dividends totalling $325.0M (2022: $Nil) and a distribution arising from corporate restructuring totalling $536.3M.

Media contacts:

Latika Shah [email protected]

About Starbucks

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with stores around the globe, Starbucks is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup.

Starbucks EMEA headquarters has been in the UK since 2015, servicing the Europe, Middle East and Africa and driving Starbucks growth strategy in the region. Starbucks opened its first stores in Europe in 1998 and has since grown to over 4,500 stores across 42 markets, with the UK remaining as the largest market.

Forward-Looking Statements 

Certain statements contained herein are “forward-looking” statements within the meaning of applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “aim,” “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve risks, uncertainties, and other factors (many beyond our control) that could cause our actual results to differ materially from our historical experience or from our current expectations or projections. Our forward-looking statements, and the risks and uncertainties related thereto, include, but are not limited to, those described under the “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” sections of the company’s most recently filed periodic reports on Form 10-K and Form 10-Q and in other filings with the SEC, as well as: 

• our ability to preserve, grow and leverage our brands, including the risk of negative responses by consumers (such as boycotts or negative publicity campaigns) or governmental actors (such as retaliatory legislative treatment) who object to certain actions taken or not taken by the Company, which responses could adversely affect our brand value; 

• the acceptance of the company’s products and changes in consumer preferences, consumption, or spending behavior and our ability to anticipate or react to them; shifts in demographic or health and wellness trends; or unfavorable consumer reaction to new products, platforms, reformulations, or other innovations; 

• our anticipated operating expenses, including our anticipated total capital expenditures;

• the costs associated with, and the successful execution and effects of, our existing and any future business opportunities, expansions, initiatives, strategies, investments and plans, including our Triple Shot Reinvention with Two Pumps Plan; 

• the impacts of partner investments and changes in the availability and cost of labor including any union organizing efforts and our responses to such efforts; 

• the ability of our business partners, suppliers and third-party providers to fulfill their responsibilities and commitments; 

• higher costs, lower quality, or unavailability of coffee, dairy, energy, water, raw materials, or product ingredients; 

• the impact of significant increases in logistics costs; 

• unfavorable global or regional economic conditions and related economic slowdowns or recessions, low consumer confidence, high unemployment, weak credit or capital markets, budget deficits, burdensome government debt, austerity measures, higher interest rates, higher taxes, political instability, higher inflation, or deflation; 

• inherent risks of operating a global business including geopolitical instability; 

• failure to attract or retain key executive or partner talent or successfully transition executives; 

• the potential negative effects of incidents involving food or beverage-borne illnesses, tampering, adulteration, contamination or mislabeling; 

• negative publicity related to our company, products, brands, marketing, executive leadership, partners, board of directors, founder, operations, business performance, or prospects; 

• potential negative effects of a material breach, failure, or corruption of our information technology systems or those of our direct and indirect business partners, suppliers or third-party providers, or failure to comply with personal data protection laws; 

• our environmental, social and governance (“ESG”) efforts and any reaction related thereto such as the rise in opposition to ESG and inclusion and diversity efforts; 

• risks associated with acquisitions, dispositions, business partnerships, or investments – such as acquisition integration, termination difficulties or costs or impairment in recorded value; 

• the impact of foreign currency translation, particularly a stronger U.S. dollar; 

• the impact of substantial competition from new entrants, consolidations by competitors, and other competitive activities, such as pricing actions (including price reductions, promotions, discounting, couponing, or free 5 goods), marketing, category expansion, product introductions, or entry or expansion in our geographic markets; 

• the impact of changes in U.S. tax law and related guidance and regulations that may be implemented, including on tax rates; 

• the impact of health epidemics, pandemics or other public health events on our business and financial results, and the risk of negative economic impacts and related regulatory measures or voluntary actions that may be put in place, including restrictions on business operations or social distancing requirements, and the duration and efficacy of such restrictions; 

• failure to comply with anti-corruption laws, trade sanctions and restrictions or similar laws or regulations; and 

• the impact of significant legal disputes and proceedings, or government investigations. 

In addition, many of the foregoing risks and uncertainties are, or could be, exacerbated by any worsening of the global business and economic environment. A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this report. We are under no obligation to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.