Is a drive-thru Starbucks coming to a town near you?

After five years of losses in the UK, coffee giant Starbucks is moving away from high street domination and finding new ways to give customers a caffeine fix.

by Elizabeth Anderson
Last Updated: 06 Nov 2012
Kris Engskov, the American tasked with the challenge of making Starbucks profitable again in the UK, has been quick to make his mark since becoming the UK managing director last November.

His focus has been improving customer service. In the last couple of months, Starbucks has introduced an extra espresso shot to its lattes and its baristas now ask the customer’s name when taking an order. Both aim to show that Starbucks is listening to what its customers want: stronger coffee and better service.

Engskov hopes this will draw new customers into the stores and ultimately boost profits. ‘Changing the recipe was a gigantic decision. But listening to customers’ feedback, they wanted stronger coffee,’ Engskov told MT in the first of our new business podcasts. ‘Absolutely it’s an expensive thing to do because we didn’t charge people for that extra shot. So people are 35p better off than they were a few months ago. But that’s a good message for us.’

When Starbucks arrived in the UK in the late 1990s, it cemented its place on the high street by taking the most prominent positions. But soaring rents and stronger competition have challenged the business’s bottom line.

Starbucks’ latest results show that the UK business made a £33m loss in the year to September. Whilst still expanding its 750 UK store portfolio, Engskov is moving away from the premium locations and looking to cheaper alternatives. In March, Starbucks said it would be closing three stores on London’s Oxford Street and will increase its drive-through portfolio beyond the 10 that already exist.

‘Starbucks has traditionally been a high street company and very focused on the urban parts of the country,’ Engskov said.  ‘But it’s a great time to be investing in smaller towns.  It’s a big country and there are lots of opportunities out there.’

Find out more about Kris Engskov’s plan for Starbucks UK by listening to the full podcast here:

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