When Starbucks first set its sights on Britain, the Seattle coffee shop aimed to become the new local.

"We hope to benefit from the pub culture in the UK to make Starbucks a natural meeting place for people," then-international president Howard Behar said.

More than 20 years after the first branch opened on these shores, the chain now has more than 1,000 outlets across Britain. There are currently 11 Starbucks in the Aberdeen area.

Yet, after years of rapid growth, trouble is brewing.

The world’s biggest coffee chain is facing growing competition from cheaper rivals such as Greggs and a squeeze on profits as a result of inflation.

Complaints about long wait times for its drinks are said to be more and more common.

Cracking down

And, at head office, the company faces charges of illegally cracking down on efforts by baristas to unionise in the US.

Starbucks shareholders have since approved an independent assessment of its commitment to workers’ rights, including whether the firm adheres to freedom-of-association and collective-bargaining standards.

New chief Laxman Narasimhan, who took on the role last week, is tasked with reinvigorating the business and reviving a share price that has dwindled over the last two years.

But the Telegraph says it is a tough task in more ways than one – Mr Narasimhan, who was chief of Reckitt Benckiser before taking over at the coffee chain, is succeeding legendary Starbucks chief Howard Schultz.

Billionaire Schultz is credited with growing Starbucks from a small Seattle business into a coffee giant with more than 36,000 stores globally.

However, he has proved a tough act to follow - the 69-year-old has had three stints in charge of the company, returning at key junctures to help revive Starbucks’ fortunes.


One of Mr Schultz’s final acts during his latest spell in charge was to redouble Starbucks’ commitment to Britain.

Last year, executives had been considering a sale of the division after rising costs ate into its profits.

UK profits dropped by a fifth to £10.4million, driven by more-expensive coffee beans and higher wages for staff.

That came despite inflation-busting price rises - the price of a Starbucks flat white rose by more than 12%, and faster than rivals such as Pret and Costa, according to figures from UCC Coffee.

However, Starbucks has now shelved plans to sell the UK business. Instead, it plans to open 100 new stores in the UK and spend £30million doing up existing cafes.

But experts believe it will need to go further to recapture momentum.

“Starbucks’ weakness has always been its food,” said Jonathan De Mello, founder of JDM Retail.

FTSE 100

The UK's top share index, the FTSE 100, was up six points at 7,627 shortly after opening this morning, following yesterday's 56-point gain.

Brent crude futures slipped 0.15% to $79.19 a barrel.

Companies reporting today

  • Full-year results: Computacenter, Vanquis

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