Starbucks reduces loss in UK

Starbucks may have become a byword for coffee shops on the high street, but it has not been able to shake off the tough market conditions. Its UK business made a loss last year, hurt by the collapse of Borders, one of the largest bookstore chains in the country.

Starbucks UK made a loss of £34m in the 12 months to 3 October 2010, although the results marked an improvement over the previous year when its loss hit £52m.

Darcy Willson-Rymer, the managing director of Starbucks in the UK and Ireland, said: "Our sales are still growing despite tough conditions on the high street and our financial position continues to improve."

As in the previous year, the British operation paid a £25m royalty fee to its US parent. The group was also hampered by the collapse of Borders in december 2009. The closure of the bookstore's sites took with it 36 of Starbucks'in-store operations, at a cost to the coffee chain of about £10m.