Starbucks’ UK sales slip 3.4%

After enjoying sixteen years of strong growth in the UK, American coffee giant Starbucks suffered a notable fall in sales in the same European country last year.

The UK subsidiary of Starbucks announced on Friday that its sales slipped 3.4 per cent to £399.4 million ($670.6 million) in twelve months ended September 2013, from £413.4 million in the previous year.

The pre-tax loss of the company, which faced severe criticism in the UK for its alleged tax evasion tactics, amounted to £20.4 million.

Despite the fall in sales, the company said that the UK business was its fastest-growing market in the UK, supported by an improving economic environment.

Commenting on the results, a spokesperson for the company said, "The UK is our fastest-growing market in Europe. Gross profit is up 13% and operating margin is up more than 22%. The loss before tax fell by more than 30%."

The coffee giant added that the fall in sales reflected the closure of its unprofitable stores in the UK, and that the company was on schedule to open one hundred new stores this year. By the end of September last year, the company had 731 stores in the UK. The number has since jumped to 735.

Last year, Starbucks paid a corporation tax of £3.4 million to the UK Government. It was for the first time in the past five years that the US-based company had paid corporation tax in the UK.

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