Starbucks UK falls to £35.2m loss as sales drop amid boycott calls and cost-of-living crisis: Calls for a consumer boycott of Starbucks coupled with cost of living pressures, dearer commodity prices and competition from new operators weighed on sales at the brand’s UK arm last year, pushing the business into a loss. Starbucks UK recorded a 4% drop in sales to £525.6m for the year ending 29 September 2024, due to a “challenging consumer environment”, causing the company to fall io a £35.2m pre-tax loss, against a £16.9m profit a year earlier. The group paid corporation tax of £1m, down from £7.2m the previous year. The company, which arrived in Britain in 1998 through the acquisition of Seattle Coffee Company, blamed misconceptions about the group’s position on the Israel-Hamas war for affecting footfall in some locations during the first half of the year. Starbucks also wrestled with new entrants into the UK’s “highly competitive” coffee market as well as cost of living pressures squeezing disposable income. A weaker consumer environment coincided with inflationary pressures for commodities such as dairy and cocoa and wage inflation. Duncan Moir, president of Starbucks Europe, Middle East and Africa (EMEA), said: “It has been a difficult period for the sector. We navigated significant macroeconomic pressures including inflationary headwinds which have also had an impact on consumer confidence. We are focused on regaining momentum by strengthening and scaling how we integrate technology across the business, building on the popularity of our Starbucks Rewards programme and further optimising our menu to ensure we continue delivering on our core offering every time.” The business, which opened 100 new stores last year, has 1,240 coffee shops in the UK, which comprise 378 company-owned stores and 862 run by licensees. The company has outlined plans to open a further 80 shops this year. Starbucks EMEA reported an 8.8% fall in revenues to $388m in 2024 and made a pre-tax profit of $114.6m, down from $141.1m a year earlier. As the business is headquartered in London, Starbucks EMEA had to pay UK corporation tax of $37.5m, up from $36.4 million. Starbucks EMEA ended the year with 4,862 shops in 42 markets, up from 4,582 sites, and plans to open a further 230 shops in the next year, including the Uk openings. Starbucks, which was founded in Seattle in 1971, is the world’s biggest coffee shop operator, with about 32,000 stores globally. In January, the company reported a smaller-than-expected fall in first-quarter sales in early signs of the brand benefiting from efforts by Brian Niccol, its new chief executive, to revive demand. Starbucks said global-like-for-like sales declined 4% in the quarter, which was an improvement on the 7% drop in the previous quarter. Starbucks reported $36.2bn in revenue last year. The company said it would not introduce any further price rises this year as it looks to appeal to consumers paring back on big non-essential spending and to ward off competition from upstart brands. Starbucks features in Propel’s highly anticipated International Brands report, featuring the 100 leading international brands in UK hospitality, and has now launched. This in-depth report explores company histories, leadership structures, site numbers and turnover figures – an essential tool for industry professionals navigating the UK hospitality market. The top 100 includes expanding brands from markets such as the US, Canada, Europe, Australia and Asia. The guide will be sent out as two files – an introductory PDF featuring deep dives into international brands from Propel’s writers, and a fully searchable Excel sheet for easy access to key data. The analysis includes Matteo Frigeri, founder of Seeds Consulting, on the challenges of recruiting the right UK franchisee, Michael Ingemann, director of Think Hospitality, on why European brands chose the UK for expansion, and Meaningful Vision founder Maria Vanifatova examining the UK market for quick service restaurant operators. The International Brands report is available for £595 plus VAT, with existing Premium Club members able to purchase at a discounted rate of £395 plus VAT. Premium Club members will receive it free on Friday, 9 May at 9am. Order your copy today by emailing: kai.kirkman@propelinfo.com.

Caravan CEO – current trading is solid with like-for-like growth in all recent months, there's a lot of flex in the brand that is unexplored: Laura Harper-Hinton, co-founder and chief executive of Caravan, the restaurant group and coffee roastery, has told Propel that current trading across its restaurant estate is “solid” with “like-for-like growth in all recent months” as she said that the business was open to exploring new formats. Speaking on Propel’s new podcast series, In Conversation, about further expansion, Harper-Hinton said: “We want to make sure that we're keeping the heart and soul in the business. And I don't think you can do that if you're growing too fast, and we'll certainly not. I know there are a lot of brilliant businesses that grow a lot faster than us, but we just want to keep it very considered and continue the sort of one to two openings a year journey. That said, I do feel like there's a lot of flex in the brand that is unexplored. We want to look at a smaller format from a restaurant perspective, but also potentially, the more brew bar, coffee bar side of things.” On current trading, she said: “Trade is solid with like-for-like growth in all recent months. Summer will see this continue and accelerate as our terraces get into full swing. Our focus for this year is looking to grow revenues and Ebitda by another big jump with the continued focus on our teams, excellent hospitality and commercial discipline.” It comes as the nine-strong restaurant side of the business reported revenue increased 10.4% to a record £24,417,282 for the year ending 30 June 2024 compared with £22,116,560 the year before. Ebitda grew 91.6% to £1,920,560 from £1,003,044 the previous year. Pre-tax profit increased to £603,474 from £179,611 the year before. No dividend was paid (2023: nil). Harper-Hinton told Propel: “The increase in revenue and profit was a result of a huge focus on commercial performance of the business alongside a 'back to basics' mindset of delivering an authentic and brilliant hospitality experience to all – all day, every day – through our newly formed 'Just Brew It' hospitality academy. This will sit alongside clever use of newly implemented technology in the business to enhance the customer journey and improve the efficiency of our operations while making this easier and better for our teams.”

Vue CEO – Minecraft film is our biggest success since Barbie: The film version of video game Minecraft has delivered the strongest opening weekend since 2023’s Barbie, Vue chief executive Tim Richards has said. He said A Minecraft Movie had enjoyed a “phenomenal, record-breaking opening”, reports The Mail. Richards added: “We are expecting this amazing performance to continue this week.” Vue – which operates 223 cinemas across Europe, including 92 in the UK and Ireland – did not publish specific figures on the film’s performance. But separate industry data showed the film – which stars Jack Black and Jason Momoa – has brought in around £233m globally on its debut weekend. Despite a gloomy economic outlook after the Budget, Britons are still spending on entertainment. Cinema bookings have been driven recently by popular releases such as Gladiator II and Wicked.

Diageo swaps Ciroc rights for Lobos 1707 Tequila stake: Diageo is exchanging brand rights for vodka brand Ciroc for a majority stake in Tequila brand Lobos 1707. The company has struck a deal with US investment firm Main Street Advisors for a joint venture covering the two brands. Diageo is swapping the majority ownership of Ciroc’s brand rights in North America for a majority stake in Lobos 1707 worldwide. The financial terms were not disclosed. Diageo formed a marketing partnership with US musician Sean “Diddy” Combs in 2007 to promote Ciroc, a tie-up that ended in 2023 amid a legal dispute between the two sides. That was settled in January 2024 when Diageo also announced full ownership of another Tequila brand, DeLeon, it had purchased with Combs in 2013. Diageo will retain the rights to Ciroc outside North America. “The Main Street Advisors track record speaks for itself and, together, we will establish a strong platform to unleash the full potential of the Cîroc brand for new generations and to drive the next phase of growth for Lobos 1707,” Sally Grimes, chief executive of Diageo’s business in North America, said. In the six months to 31 December, Ciroc’s net sales fell 32% on a reported and on an organic basis. Volumes fell 28% organically. Lobos 1707 Tequila was set up by in 2020 by Diego Osorio. US athlete LeBron James became an early investor in the company in the same year. Paul Wachter, Main Street Advisors’ founder and chief executive, said: “Cîroc and Lobos 1707 have incredible potential and, through this collaboration, we are unlocking new opportunities to accelerate their reach, resonance and revenue growth in ways that traditional models cannot achieve.”