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Starbucks to open 100 new UK coffee shops as it reveals lower British tax bill

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Starbucks has revealed plans to invest £30m in the UK and open 100 new cafes, a year after it was reported to be considering selling the British arm of the coffee chain.The investment plan came as the company reported it paid lower tax on its UK operations in 2022, even as gross profits surged, as royalty payments to other group companies expanded rapidly.The coffee chain paid £4.6m in corporation tax in the year to 2 October 2022, compared with £5.4m the year before, according to its latest accounts.Seattle-headquartered Starbucks had reportedly been considering selling the UK operation.

The chain appointed Laxman Narasimhan as its chief executive last year. Narasimhan, who had been chief executive of the FTSE 100 company Reckitt Benckiser, has been tasked by Howard Schultz, the coffee chain’s billionaire founder, with expanding Starbucks with a particular focus on the US and China.However, the UK investment programme appeared to suggest Starbucks will hang on to its British cafes, which reported stronger financial results including revenues of £449m, rising above pre-coronavirus pandemic levels for the first time.The UK subsidiary’s gross profits expanded to £129m, up from £95m.

Yet those gross profits did not translate to higher profits before tax, as its royalties and licence fees also grew rapidly, from £26.5m to £34.5m.The company also noted a “challenging inflationary environment during the year”, with higher energy costs, wage increases and supplier costs.About 30% of Starbucks 1,066 cafes in the UK are operated by the company directly, while 70% are run as franchises by other businesses which pay to use the brand.

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