Starbucks UK Losses Rise to £29.8m as Staff Costs and Bean Prices Surge
Starbucks UK operating losses widened from £27.5m to £29.8m year-on-year while turnover grew £30m to £556.3m, with staff costs rising from £118m to £129m despite cutting 200 jobs. Higher minimum wage and National Insurance contributions plus up to 10% wholesale coffee cost increases squeezed margins.
1. UK Financial Performance
Starbucks UK reported an operating loss of £29.8m for the year to October 2025, up from a £27.5m loss the prior year. Despite this, revenue climbed by £30m to £556.3m, driven by price adjustments and modest sales growth.
2. Rising Employment Costs and Wholesale Input Prices
Staff expenses rose from £118m to £129m as minimum wage increases of 4.1% and higher employer National Insurance contributions took effect, even after cutting 200 roles to a headcount of just over 5,320. Wholesale coffee bean prices jumped by as much as 10% due to poor weather in Brazil and rising freight costs, while energy and milk costs also increased.
3. Restructuring Measures and Strategic Outlook
A £750m global restructuring plan led to 900 job cuts and closure of 77 UK cafés as Starbucks seeks to restore profitability. The UK arm delivered a £30m post-tax profit after a £71m tax credit, and leadership remains confident in long-term strategy despite ongoing cost pressures.