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UK: Starbucks Reveals Major Expansion Plan

Starbucks has revealed plans to create up to 5,000 jobs in the UK over the next five years as it ramps up its drive-thru business. The global coffee giant wants to expand the number of drive-thru branches in the UK from the current nine to 200. Starbucks said around half of the drive-thrus will be operated under licence by petrol forecourt retailer Euro Garages, which mainly operates in the Midlands and north of England, while the remaining stores will be company owned.

The company said the 200 drive-through outlets, in addition to 100 conventional store openings, would see some 5,000 jobs created in the UK, and bring its total store count to over 1,000. The announcement, which comes two weeks after official figures revealed youth unemployment had exceeded one million, was welcomed by Prime Minister David Cameron, who said it was a “great boost to the British economy”.

The move, which comes after an aggressive expansion backfired badly in 2008, is at odds with other parts of the food and drink industry which are being forced to pull down the shutters as cash-strapped consumers curb spending and raw material inflation eats into their profit margins. However, Starbucks’ UK sales have grown for nine quarters in a row on a like-for-like basis – albeit the group still lost £34.2m at the net level in the year to 30 September 2010.

Kris Engskov, Starbucks’ newly appointed Managing Director for the UK and Ireland, reckons coffee is having its moment, just as wine did 25 years ago, where drinkers are discovering a taste for different varieties and an interest in the provenance of the product. “This might be a better time than any [to expand],” Engskov said. “Rents are coming down across the UK. If there’s anything we’ve learnt over the last few years, especially in the US, it is to invest ahead of the curve.”

He added: “Customers told us that they now expect the best possible coffee wherever they are and the success of our first drive-thru stores shows that this is a huge opportunity.”

Starbucks has recently expanded into different marketplaces in the UK including trains, planes, supermarkets and workplaces. In 2010, it opened 35 motorway stores with Welcome Break, serving seven million cups in the first year of operation.

NamNews - Thursday 1st December 2011

UK: Starbucks Reveals Major Expansion Plan


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