Starbucks continues to adjust to new realities in the important U.K. market. Not only will it be paying more taxes there following a public outcry, but now the icon of American “lifestyle” coffee brands is bringing its less-expensive Seattle’s Best Coffee marque to Britain.
The arrival of Seattle’s Best in the UK appears aimed at shoring up Starbucks’ performance against less-expensive coffee competition from McDonald’s and other quick-service restaurant brands. Starbucks sales fell in fiscal 2014 in the U.K. for the first time since Starbucks entered the market in 1998. In a cost-cutting move, the company has been closing some of its 550 British outlets that aren’t profitable due to expensive rents.
“We chose to launch Seattle’s Best Coffee in the U.K. because we know Brits love their coffee,” Simon Hillier, Starbucks European foodservice director, told the Independent. The cheaper brand offers an “everyday range” of coffees for “coffee-on-the-go consumers.” Those consumers will have to search a bit to find the Starbucks-owned SBC, however.[more]
Seattle’s Best will be sold in the U.K. not from its own stores, a la the upscale Starbucks brand, but through retail partners such as Asda, KFC and Kiddicare, which will sell SBC-branded expresso drinks and filtered coffee in their cafes. In the US, Seattle’s Best has been expanding and now is sold in 50,000 locations, including 40 of its own branded cafes.
Meanwhile, no doubt more than a few Brits have been keeping an eye on complaints that Starbucks should be paying more corporate taxes, having been accused of aggressively exploiting tax loopholes along with Google, Amazon and other American companies. A U.K. parliamentary committee accused the companies of moving British profits offshore in order to dodge taxes.
In any event, Starbucks will be moving its European headquarters to London from Amsterdam at the end of this year, effectively instigating the payment of more U.K. taxes. The company said the switch would allow it better supervision of the U.K., its biggest market in the region.
And now that will include supervision of the arrival of Seattle’s Best.
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