Starbucks Coffee Company Ltd

Telephone:

020 7878 4900

Activities:

Starbucks is a wholly-owned subsidiary of Starbucks Corporation of the US, which claims to be the world’s largest retailer and roaster of specialist coffee. It is the market leader in the UK branded coffee shop market.

The group also franchises and licences products such as roasted coffee beans and Frappucinos for sale in supermarkets, and sells coffee beans wholesale to companies such as Eurest (Compass’s staff catering arm) under the “We proudly brew Starbucks” banner.

Key People:

Senior vice-president and president for Europe, the Middle East and Africa: Cliff Burrows
Managing director, UK: Phil Broad

Commentary:

Starbucks moved straight into the number two slot in the fledgling UK coffee bar market when it bought the Seattle Coffee Company in 1998. By 2003, it had supplanted Whitbread’s Costa Coffee as the market leader and has retained its supremacy ever since.

According to the annual report into the UK coffee bar scene by Allegra Strategies, Starbucks remains the fastest-growing company in the sector and has increased its share of the market by 4.8% since December 2001.

The group, which is opening an average of 50 new sites a year, accounted for 17.4% of the £1b branded coffee bar market by the close of 2004.
 
The company has plenty of opportunities to expand through existing and new partners, franchising and wholesaling. It entered the French market in early 2004 and plans to move into Ireland in 2005.

Strategy:

“Starbucks’ three- to five-year goals are to grow total revenues by approximately 20 per cent per year, achieve comparable store sales growth of three to seven percent with monthly anomalies, and increase earnings per share by approximately 20-25 percent per year. Starbucks’ long-term store target was recently raised from 25,000 to a minimum of 30,000 stores worldwide, with at least 15,000 locations outside the USA”.

Source: Starbucks Corporation annual meeting of shareholders, 9 February, 2005

Operating Data:

In 2004, Starbucks Corporation reported net earnings in excess of $390m (£207m) on sales 30% ahead at $5.2b (£2.8b). The UK arm was forecast to turn over £220m in 2004.

Starbucks Corporation has more than 9,000 coffee bars in 35 countries in North America, Europe, the Middle East and the Pacific Rim.

Number of UK stores: more than 430

Number of employees worldwide: 74,000
Number of UK employees: about 5,500

Address:

11 Heathmans Road

London,

UK