According to recent reports, Starbucks is looking to sell its UK business. Although sales have recovered somewhat with offices reopening, does lower loyalty in the UK versus the US pose a problem? In today’s Insight Flash, we compare trends in the US versus UK, loyalty metrics, and cross-shop to dig into the company’s performance across geographies.
Looking at spend versus pre-pandemic levels, Starbucks UK growth is very similar to US growth. On a three-year basis, UK spend grew 34.4% versus 34.1% in the US. Even year-over-year the patterns are similar, with spend growing 15.0% for Starbucks in the UK and 14.1% for Starbucks in the US. However, Starbucks is underperforming the broader subindustry year-over-year in the UK as it laps a stronger recovery at the beginning of vaccine rollouts.
Spend Growth
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However, Starbucks may have more trouble getting customers in the UK to keep coming back. Even though the US is a more mature market, among customers who made their first Starbucks transaction in our cohort history in January 2020, only 8% came back the next month in the UK, versus twice as high a rate of 17% returning in the US. In June, 12% of those customers were still transacting at Starbucks in the US versus only 8% in the UK.
Loyalty
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Some of the pressure on Starbucks in the UK may be coming from more potent competitive threats. Of UK guests who stopped in at Starbucks in June 2022, over a third also made a purchase at Costa and over a quarter chose a snack from Greggs. In contrast, in the US Starbucks’s closest subindustry competitor was Dunkin’ Donuts, but only 16% of Starbucks shoppers also bought an item there.
Cross-Shop
![](https://staging.consumer-edge.com/wp-content/uploads/2023/07/20220721_03-1024x576.png)
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