Starbucks to advertise on US TV for first time

16 November 2007 by
Starbucks to advertise on US TV for first time

Coffee chain Starbucks is to make its first foray onto the TV screens of America after sales in the USA began to stagnate as consumers tightened their purses.

The company reported its first quarterly decline in the number of US customers visiting its stores (during its fourth financial quarter), as increasing dairy costs and rents forced it to put up the price of its lattes and cappuccinos putting customers off.

Starbucks is also facing a price war with lower cost chains including McDonalds and Dunkin' Donuts.

The coffee chain giant finished its last quarter of its financial year ending 30 September with a 19% increase in sales to $1.7b (£834m) despite the fall in customer numbers.

This jump was primarily driven by the opening of 1,065 retail stores in the USA during the past 12 months

International sales, including the UK, were robust with sales for the fourth quarter of the year up 31% at $472m (£231m).

Total sales at Starbucks for the full year rose from $7.8b to $9.4b (£4.6b). Pre-tax profit grew less strongly from $564m this time last year to $672m (£328m).

In total last year the company opened 2,571 new stores, 70% in the USA and 30% in the rest of the world. It plans to match that rate in 2008.

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By Christopher Walton

E-mail your comments to Christopher Walton here.

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