Can't stand it?! Starbucks is considering selling Europe's largest market

Starbucks is considering selling its UK business because of competition from coffee chains such as Pret A, Manger, Tim Hortons and Costa, the Times reported on July 16.

According to the report, a person familiar with the matter revealed that Starbucks has asked the international investment bank Hualian Nocky to assess the interest in its UK business, and has not yet launched a formal sale process, but the investment bank will continue to make strategic choices for its international operations.

The UK is currently Starbucks' largest market in Europe, the Middle East and Africa. Starbucks has 1000 stores in the UK, of which 297 are proprietary and the remaining 703 are franchises, according to results as of October 2021.

Due to the epidemic, the financial performance of Starbucks in the UK is still in the doldrums. Although the British government has relaxed its epidemic prevention and control policies and Starbucks' performance in the region has rebounded, it has not returned to pre-epidemic levels, mainly because most workers work from home and fewer tourists.

Market analysts also said at the beginning of this year that coffee chain stores in the UK would take at least four years to recover from the downturn of the epidemic.

In addition to the UK market, China, Starbucks' second-largest market in the world, also failed to meet Wall Street's targets for sales growth because of the country's strict management of epidemic prevention and control. Starbucks also suspended his guidance on quarterly earnings in May for the rest of the fiscal year.

In the United States, employees in the region are constantly unionized because they are dissatisfied with the company's current welfare policies and work pressure, leading Starbucks to recall Howard as a temporary CEO to deal with a variety of things that can affect the operation of the brand in the region, but still failed to stop employees from joining the union.

Howard also said on the 11th of this month that he would reshape Starbucks' corporate culture, saying that he would redefine the company's relationship with employees, improve store partner benefits and provide customers with a new store experience. Although Starbucks reported an upward trend in US market sales in the first quarter of this year, it can be vaguely felt in these plans that the overall recovery and sales growth have been affected by the unsatisfactory working conditions of employees.

This is not the first time Starbucks has sold its regional business. Starbucks plans to sell its business in South Korea during the 2021 fiscal year. In early January, Korea's Central Daily reported that Starbucks South Korea was officially acquired by South Korea's largest retailer, Yi Buy Emart, while South Korea's Starbucks will change its name to SCK. According to public data, South Korea was Starbucks' fifth largest market in the world at that time.

In July 2021, South Korea's easy Buy Emart acquired 17.5 per cent of Starbucks' other half stake in July 2021 and became Starbucks' largest shareholder in South Korea, while the remaining 32.5 per cent of Starbucks was taken over by GIC, the sovereign investment fund of the Singapore government.

Affected by the epidemic, the rising futures prices of coffee beans and the increasing headwinds of multiple inflation in recent years have far exceeded Starbucks' expectations.

Photo Source: Internet

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