A tax credit of £13.7m was granted to Starbucks despite its rising retail sales

• Starbucks UK retail arm gained a 13.7 million pound tax credit despite rising sales.
• Large royalty payments to the parent company resulted in significant annual financial losses.
• Increased operational costs and inflation contributed to wider losses for the retail business.

The retail branch of Starbucks in the UK obtained a 13.7 million pound tax credit last year. This occurred while the company expanded its presence by opening 92 new outlets. Total store numbers reached 1,304, which includes those managed by franchise partners.

Annual sales grew by 6 percent to reach 556.3 million pounds. This growth was driven by new loyalty schemes and price hikes. The company also introduced food baked fresh in stores to attract more customers and boost overall revenue.

Despite higher sales, the company reported losses of 41.3 million pounds. These losses are linked to 40 million pounds in royalty and licence fees paid to its parent company. Consequently, the business paid no corporation tax for the year.

The Fair Tax Foundation noted that this pattern repeats every year. The organization highlighted that growth in income does not lead to tax because of heavy royalty payments. Similar payments were made previously, leading to a 35 million pound loss in 2024.

Financial pressures include a 35 percent rise in unroasted coffee prices since August 2025. Additionally, wages and benefits increased by 7.8 percent. These factors, along with inflation, created a challenging environment for the company’s retail operations.

To maintain liquidity, the parent group invested 90 million pounds in cash into the UK business. This funding helped cover restructuring costs and financial pressures. The company also secured a 70 million pound credit facility expiring in December.

Staffing changes saw a reduction of 244 employees, leaving 5,352 workers. The company shifted from part-time to full-time staff. Meanwhile, the group paid a 207 million dollar dividend to its US parent company.

A spokesperson stated that the company remains committed to paying all taxes where they are due. They claimed their tax approach aligns with the interests of stakeholders, including governments, partners, and the communities where they operate.