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Cold drinks to blame for Starbucks weak sales

09 August 2006
Cold drinks to blame for Starbucks weak sales

Higher than expected demand for cold drinks such as Frappuccino have been blamed for Starbuck's weakest monthly same-store sales rise in four and a half years.

While analysts suggested lagging July sales could be down to higher gasoline prices and interest rates hitting customers' wallets, the coffee chain giant is said to blame the slow-down on the extra time needed to make cold blended drinks, including its new Banana Coconut Frappuccino.

"During the heatwave in July we saw more and more customers choosing our ice blended Frappuccinos with iced African coffees and iced vanilla lattes also proving very popular," a spokeswoman for Starbucks UK told CatererSearch.

Starbucks refused to comment further on how this demand for more time-consuming beverages would affect customer service and sales in UK outlets.

On a comparable store sales basis, sales at company-operated stores worldwide increased just 4% for the four-week period ending 30 July, compared with the same four-week period in the 2005 financial year.

The figure is 3% below last year's growth for the same month and 2% below Wall Street predictions, according to reports in the financial press.

By Matthew Batham

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