Starbucks is eyeing a sale of its UK business
// Starbucks are understood to have hired adviser Houlihan Lokey to assess interest in buying the coffee giant’s UK business
// The coffee chain has been facing increased costs and competition in the UK
Starbucks is exploring a sale of its UK business as costs rocket and competition from new players ramps up.
The coffee chain has hired adviser Houlihan Lokey to sound out parties interested in buying its UK division, where it operates more than 1,000 shops, around 300 which are company-owned, according to The Times.
Starbucks are facing increased competition from rivals including Pret A Manger, Costa, Greggs, and McDonalds.
Earlier this month, Canadian giant Tim Hortons opened its first London store and chief commercial officer Kevin Hydes told Retail Gazette that it would open at least 30 new stores across the UK this year and is aiming to double that next year.
Starbucks Coffee Company UK reported sales of £328 million for the year to October 2021, and bounced back into the black following a year in which it was blighted by Covid restrictions. It made pre-tax profits of £13.3 million, compared with a £40.9 million loss in 2020.
However, changes in working habits has hit Starbucks’ city centre locations. The coffee chain noted in its latest company accounts that while its suburban and retail park locations had recovered, city centre sales had been slower as working from home became more prevalent.
Starbucks told the newspaper that while it had not initiated a “formal sales process” of its UK business, it continued to “evaluate strategic options” for its company-owned international business.