Starbucks Is Making A Big Push In Britain With 100 New Stores

In a country known for its avid consumption of tea, coffee has become increasingly popular. So much so, that Starbucks announced it will open 100 new stores in Britain in 2023, even as the country faces a possible economic recession (via Reuters). The move to open new Starbucks locations around the country follows a 37% increase in sales in 2022 in the U.K. as more workers returned to offices and drive-thrus were added to stores. 

Starbucks isn't only focused on growing in the U.K. but has announced it wants to open more than 400 locations in India, Indonesia, Thailand, Malaysia, Laos, and the Philippines in 2023. 

Plans for new locations come at a time when the company's worldwide sales are up 5% to kick off the year. Some of that increase can be attributed to the rising price of a latte or other beverages at Starbucks, which raised its prices 6% in 2022

Despite the increased cost of a Starbucks beverage, customers have shown they are loyal to the company — and that loyalty and excitement are what Starbucks is counting on as it continues its expansion in Britain.

New stores will be smaller

In addition to opening 100 new locations in Britain this year, Starbucks plans to renovate existing locations for a total investment of about 30 million pounds, or $36 million U.S. dollars. Starbucks already operates about 1,000 stores in the country, coming a long way since its first location opened in 1998 in London's Chelsea neighborhood. 

The new stores will be smaller format, focusing more on to-go orders at the drive-thru and less on in-store dining. In recent years, Starbucks has found success with smaller locations, which are not only efficient for the customer, but less expensive to open and operate.

Cost is especially important because Starbucks' expansion plans coincide with a possible economic recession in Britain. The Bank of England recently predicted the potential for a recession that could last more than a year. Higher energy costs and other increased costs are being cited as possible reasons. 

In fact, Starbucks itself has been coping with higher costs related to coffee, milk, and packaging. Acknowledging current economic conditions, Duncan Moir, president of Starbucks operations in Europe, Middle East, and Africa, said he is cautious about the macro-economic environment, but says investments will continue.