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Wed 30th Jul 2025 - Update: Starbucks sales decline but revenue beats expectations, to phase out pick-up only outlets |
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Starbucks sales decline but revenue beats expectations, to phase out pick-up only outlets: Starbucks has reported its sixth straight quarter of same-store sales decline as the company implements a turnaround strategy but cheered investors with better-than-expected quarterly revenue. The world’s largest coffee chain said group net revenues in the three months to June 29 rose by 4% to $9.5bn against forecasts of $9.31bn. The shares rose $4.30, or 4.6%, to $97.25 in after-hours trading in New York after the earnings report, up almost 24% in the past year but just 1.9% since the start of the year, reports The Times. Starbucks also reported that overall same-store sales declined by 2% for the quarter against expectations of a 1.2% dip. Net income fell 47% to $558m in the period. However, in China, the company’s second-largest market, same-store sales grew by 2% for the three months. Chief executive Brian Niccol has pushed for a simplified menu, freshly baked food items, cups with handwritten messages and quicker service as he tries to drive a brand reset. He has also pledged to increase investments in staffing in all 10,000-plus Starbucks-owned US stores by the end of the summer. The company has a stock market value of $106b, with 32,000 stores in 80 countries. “We’ve fixed a lot and done the hard work on the hard things to build a strong operating foundation, and based on my experience of turnarounds, we are ahead of schedule,” Niccol said. “We are making tangible progress in our ‘Back to Starbucks’ strategy.” Customer visits to the coffee chain operator were down by an average 0.1% between April to June, according to Placer.ai, the research firm. That was better than a 0.9% drop in the previous three months, suggesting that Niccol’s initiative was starting to have an effect. Starbucks said it was confident that new products coming next year, including a cold foam protein drink, coconut water-based beverages and improved baked goods, would help turn around lagging US sales. Meanwhile, Starbucks says it will phase out its mobile order and pickup-only outlets because they “lack warmth”. The company has around 90 shops in the US that have no seating for customers. The move will not affect the firm's mobile ordering service, which accounts for almost a third of transactions, the BBC understands. “We found this format to be overly transactional and lacking the warmth and human connection that defines our brand,” Niccol told investors. The same level of convenience can be provided by its traditional cafes through mobile ordering, Niccol added. Instead, the company will prioritise “welcoming coffeehouses with great seats” and focus on delivering drinks in four minutes or less in its cafes and drive-throughs. The BBC understands that some of the current pickup-only outlets will be converted to include seating. Starbucks opened its first pickup-only outlet, which was designed to make collecting orders and delivery easier, in New York in 2019. At least 1,000 of its cafes in the US will be revamped by the end of next year, with a new look and plans to replace thousands of seats that were removed, said Niccol.
Premium Club members to receive new searchable and segmented New Openings Database and videos from Operational Excellence Conference this week: The next Propel New Openings Database will be sent to Premium Club members on Friday 1 August. The database will show the details of 157 site openings, including which company has opened a site or its plans to open one in the future. It will have details on what type of site it is and its location, and there will also be a website link to the businesses. The database is published on a monthly basis and Premium Club members will also receive a 9,157-word report on the 157 new additions to the database. The database includes new openings in the cafe bakery sector such as Isle of Wight café concept PO41 Coffee House, West London bakery concept Layla Bakery, and Açai brand Oakberry. Premium Club subscribers will also receive all the videos from the Operational Excellence Conference on Friday, at 9am. They include Karen Turton, founder of Purple Story, setting out the four fundamentals of operational excellence – people, profitability, performance and productivity. Premium Club members also receive access to five other databases: the Turnover & Profits Blue Book, the Multi-site Database, the UK Food and Beverage Franchisor Database, the UK Food and Beverage Franchisee Database and the Who’s Who of UK Hospitality. All Premium Club subscribers will be offered a 20% discount on tickets to Propel paid-for events and discounts on specialist sector reports. Operators that are Premium Club subscribers are also able to send up to four members of staff to each of our four Multi-Club Conferences for free. Premium Club subscribers receive their daily Propel Info newsletter 11 hours earlier than standard subscribers, at 7pm the evening before. They also receive videos of presentations at eight Propel conference events two weeks after they are held. This represents around 100 videos of industry insight over the course of the year. Premium Club subscribers will be sent a dedicated monthly newsletter that will highlight key updates in the sector and direct subscribers to all the vital content their membership offers. Premium Club subscribers also receive exclusive opinion columns every Friday at 5pm, which include the thoughts of Propel group editor Mark Wingett and a host of industry leaders from across the sector. A Premium Club subscription costs an annual sum of £495 plus VAT for operators and £595 plus VAT for suppliers. Companies can now have an unlimited number of people receive access to Premium Club for a year for £995 plus VAT – whether they are an operator or supplier. Email kai.kirkman@propelinfo.com today to sign up.
Sayers & Poundbakery makes a loss, extending opening hours to capitalise on breakfast opportunity, rolling out extended range: Sayers & Poundbakery – the new company formed when north west independent retail bakery Sayers and sister brand Poundbakery were bought out of administration in 2019 – made a loss in the year to 1 June 2024 but said it is extending opening hours to capitalise on the breakfast opportunity and rolling out an extended range. In 2023, the company made its first profit since it started trading in 2020, reporting a pre-tax profit of £463,261. This turned into a loss of £676,916 in 2024 as turnover at the 20-strong company dropped from £42,988,777 to £41,118,411. The company also received £500,000 in compensation following a landlord’s decision to terminate a lease agreement early, as the building was scheduled for demolition. The company had net liabilities of £1,161,000 (2023: £484,000) and cash at bank and in hand of £301,000 (2023: £266,000) at the year end. No dividends were paid (2023: nil). Director Karen Wood said: “The company continues to focus on increasing sales, maintaining margins and reducing costs. Breakfast continues to be a growth area for the business and to capitalise on this opportunity we have extended opening hours and are increasing our range to help maintain the growth of sales during the morning. Building on the strength of its related company supply of savoury products it will be rolling out an extended pies and pasty range to its top 20 shops. This will be combined with improvements to its coffee offer, merchandising and price communication via TV screens in the shops to drive customer spend. The company continues to make improvements to its back of house operations with the roll out of new IT solutions to increase efficiency and speed of information.” Company behind four-star Hampshire hotel makes a loss after navigating ‘several significant challenges’: The company behind the four-star Langstone Quays Resort hotel in Hayling Island, Hampshire, said it made a loss in the year to 30 November 2023 after navigating “several significant challenges”. The company’s pre-tax profit of £150,045 in 2022 turned into a loss of £244,551. Its turnover rose from £5,339,979 in 2022 to £5,447,617. Of this, £2,669,549 came from rooms (2022: £2,579,141), £2,233,788 from food and beverage (2022: £2,273,927) and £356,977 from health club and spa (2022: £316,013). Post year end, all bank loans were refinanced with a new lender, with a final repayment date of March 2029. Director Paula Walker said: “During the period under review, the hotel navigated several significant challenges while making strategic improvements to enhance long-term performance. The previous year’s increase in utility costs continued to pressure financial outcomes. Additionally, the rise in interest rates, staffing issues and supply chain disruptions further hampered profitability. Despite efforts, there was increased reliance on third-party agencies, and it was not possible to fully pass on the inflationary increases to customers, leading to a strain on margins. In response to these challenges, strategic investment was necessary. The completion of the 45 refurbished bedrooms was finalised to cater to the family market.”
London pop-up pizza concept opens first permanent site: Ace Pizza, which has been operating as a residency at The Pembury Tavern in London’s Hackney, has opened its first permanent location. Owner Rachel Jones has launched the venue on in the former Fish House site at 126-128 Lauriston Road, also in Hackney. Jones has developed her own style, dubbed “The London-style pizza”, featuring “the chew and char of Neapolitan dough with the structure and foldability of a New York slice”. The concept was inspired by Jones’ trips to her aunt in Italy, and her love for Italian-American comfort food eventually led to her setting up Capish? with Kerb, which laid the foundation for Ace Pizza. Jones said: “We’re so excited to be opening Ace Pizza’s first restaurant in Victoria Park. We’ll be serving up some of our much-loved classics, but there’ll also be a whole new line-up of pizzas you won’t find anywhere else.”
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