Starbucks crashes to £ 41million loss after year of closures and Covid restrictions – .

Starbucks crashes to £ 41million loss after year of closures and Covid restrictions – .

One of the UK’s largest coffee chains recorded a loss of £ 41million after being forced to close branches and restrict trade in response to the Covid outbreak.
In a report to Companies House on Friday, Starbucks said its revenue through September 2020 had fallen to £ 243million, down 32.7% due to heavy restrictions imposed for much of the year.

Despite the pandemic, Starbucks continued to pay all of its staff and took no government leave for its non-franchised stores, which account for around 30% of all UK locations.

The business saw some recovery when stores were allowed to reopen in the summer, with UK city centers trading at 34% of the previous year’s levels, reaching 56% in September 2020.

British bosses have continued to pay rents throughout the pandemic period covered by the results, although they have entered into lease negotiations to agree reductions where possible.

Starbucks employees continued to receive their full pay throughout the pandemic – without help from the UK’s leave scheme

They have also invested heavily to support delivery platforms, including Uber Eats and Just Eat, to tap into the home delivery market, alongside accelerating a review of the store portfolio.

Starbucks did not make any layoffs during the period and subsequently hired 400 new employees across the UK.

Its financial situation was also helped by the abandonment of royalties to its parent company, although the coffee chain suffered a blow of £ 1.8million from the permanent closure of three stores and an additional charge of 10, £ 4million vs. 35 underperforming stores.

In its European, Middle Eastern and African territory, the company revealed that sales fell 32% overall to $ 168m (£ 121m), with 86% of stores closed at the peak pandemic in April 2020.

The Middle East and Turkey were particularly dynamic, with the opening of 167 new stores and the deployment of drive-thru, which increased sales by 24%. But strict foreclosure measures across Europe affected revenue there by 71%, the company added.

The company said it continues to adapt to changing consumer behavior and trade restrictions.

A statement said: “Starbucks continues to assess and respond to government-mandated rules on social distancing and operational practices, navigating local and national lockdown rules in the UK and the EMEA (Europe , Middle East and Africa).

“The region continues to be supported by Starbucks Corporation, given the strategic importance of the UK market for testing new initiatives in coffee, foodservice and point-of-sale.

“The company expects continued change in consumer behavior, which will result in further evolution of its stores, locations and offerings in the future. “


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