Starbucks Cautious on Britain Due to Brexit and Terrorism ConcernsBy
Coffee company’s profit in Britain declined 74% last year
Customer traffic “noticeably down” across U.K. stores
Starbucks Corp., 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 U.K.
“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 U.K. business registry Companies House on Wednesday.
Profit in the U.K. tumbled 74 percent to 6.7 million pounds ($8.4 million) in the year ended Oct. 2, 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 program that locks in customers. U.K. 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 U.S., the company is facing pressure as its mobile-order-ahead application causes backups at the pickup counter.
Starbucks said its U.K. business is “investing significantly” in lighter food options including pots of fresh fruit, salads and wraps. It’s also remodeling stores to “reflect changing customer demands,” it said.