Coffee chain Starbucks saw large profit increases across its European, Middle Eastern and African divisions in 2016 but UK and US sales declined this year.
A report in the Telegraph last week said: “Profits rose by nearly 75pc in Starbucks’s European, Middle Eastern and African division last year as the coffee giant continued its expansion into new markets.”
Although the figure applies to the business year up to 2 October 2016, the company announced its intentions to develop worldwide markets only last July.
However, profits fell 60 percent in the UK in exactly the same period, with the company blaming Brexit for the collapse. It paid only £6.7 million due to experiencing “an economic slowdown”.
It’s certainly true that Starbucks’ record of paying minimal tax has been a contentious issue for several years in Britain. (See my video interviews with hard-left activists and disaffected Liberal Democrats occupying Starbucks shops below.)
Additionally, a heartfelt declaration in January 2017 to concentrate on hiring refugees in the United States proved instead to be a marketing miscalculation. The resulting storm on social media hit US sales by four percent and wounded the brand internationally.
It remains to be seen if Starbucks struck preferential tax deals for its new activities in Turkey, South Africa, Slovenia and Italy. Whether it continues to gain an upper hand or instead shoots itself in the foot one more time will certainly be worth watching.