Starbucks is reported in CityA.M. to have made a profit in the UK – for the first time in 17 years.
As is well known, Starbucks in the UK has received widespread criticism for its failure to pay corporation tax, with sophisticated international accounting practices being blamed for reducing its UK tax bill. In 2013, suffering from intense public criticism, it agreed to pay £20 million in tax contributions.
However, Starbucks made a profit of £1.06 million in the year to September 2014. This contrasts to the previous year when it lost £20.5 million as it closed stores, reduced excessive rents, and upgraded its products, including the introduction of its Reserve coffee range.
Mark Fox, Starbucks’ boss in the UK, commented:
“The strong performance is the result of a turnaround strategy that has focused on engaging with our employees, giving customers more, growing the business and improving our model, by rebalancing the store portfolio and carefully managing costs.”
Starbucks also paid a substantial increase in tax – £11.4m in tax, up from £3.7m in 2013.