Trading outlook warms up for Starbucks

The world's largest coffee chain saw UK sales rise 3.9 per cet in the final three months of 2009, helped by a six per cent surge in December.

Its recovery picked up pace across the group, with earnings leaping to $241.5m (149m) in the quarter – more than three times the $64.3m (39.7m) seen a year earlier at the height of the global recession.

Starbucks said more people were visiting its shops and spending more money than they did during its first quarter.

The Seattle-based company is opening stores again across the United States, after a tough past couple of years that saw it shut outlets and lay off workers.

It also pledged a focus on customer service in its non-US operations after admitting this got lost amid a rapid expansion programme.

Starbucks now has a record number of customers visiting UK stores – more than two million a week.

The group said it saw Starbucks coffee becoming "an extension of people's lives" in the UK; it hopes the coffee shop culture will rival the pub.

Its first-quarter sales surge marked its sixth consecutive month of like-for-like UK growth.

But it has been a tough recession for Starbucks, with consumers reining in spending and stiff competition from Whitbread-owned rival chain Costa.

Starbucks has closed a number of stores in the UK, as part of a recent programme to shed some 900 shops worldwide.

The collapse of Borders bookshop chain – in which Starbucks had a chain of concessions – also left it with 36 fewer outlets.

It now has 661 stores across the UK, compared with 712 the previous quarter but Starbucks intends to rebuild its UK store base over this year.

Darcy Willson-Rymer, UK managing director, said: "I'm pleased that the big investment we are making in the UK business is finding favour with customers, but we do expect 2010 to remain challenging."