Starbucks looks to US after ‘losing its way’

STARBUCKS has “lost its way” in recent years, its interim chief executive said, amid speculation its UK coffee shops could be sold off as the company plots a turnaround.

Howard Schultz, the coffee chain’s long-time boss who returned earlier this year, unveiled plans to spend $450m (£390m) on Starbucks’ North American stores next year as part of plans to spur growth.

Investment will include fitting stores with new equipment to allow baristas to make its hot and cold drinks faster. The kit is expected to cut the time needed to make a Frappuccino by more than half.

Mr Schultz said he believed that “the best days of Starbucks are ahead of us”, as he readies to hand the reins to incoming chief executive Laxman Narasimhan, who will be leaving his post at London-listed Reckitt Benckiser.

Mr Schultz stepped in as Starbucks interim chief executive in March this year for his third term after his successor in the post, Kevin Johnson, said he would be retiring. Mr Narasimhan is expected to take over next month.

The move to invest heavily in the US comes amid speculation the company is looking to sell its UK business, where there are more than 1,000 Starbucks coffee shops. Earlier this summer, reports suggested that Starbucks had appointed advisers to gauge how much takeover interest there is, although the company said it was “not in a formal sale process for the company’s UK business”.

The UK is one of its largest markets and employs 4,000 people.

Coffee shops including Starbucks face spiralling costs, with many having to significantly increase their prices as a result. Research from data company UCC Coffee showed that coffee drinkers were being hit by price rises of as much as 21pc between August 2021 and July 2022. The figures suggested the price of a flat white has now topped £3 across Britain’s largest coffee shops.