Starbucks has raised fears of a customer boycott in Britain after breaking with practice and failing to give any details of the performance of its UK business over Christmas.
The coffee chain has faced heavy criticism and calls for customers to avoid its stores over its UK tax affairs, but claimed yesterday that customers had “stayed loyal” despite the furore.
Starbucks has proved a lightning rod for public anger over the minimal tax paid by some high- profile multinationals in Britain. It emerged late last year that the world’s largest coffee chain has paid just £8.6m in corporation tax on £3bn of revenues since launching in the UK more than a decade ago.
“There is no small irony in them not giving information about the UK business, given the lack of transparency over tax has been a major issue,” said Murray Worth, a spokesman for UK Uncut, a campaign group. On releasing fourth-quarter results in November (Xetra: A0Z24E - news) , the Seattle-based company said its UK business had seen a “slightly positive same-store sales increase both for the quarter and the year”.
In its first-quarter results for 2012, released a year ago, the group said some stores in the UK had enjoyed their best trading period so far, that seasonal drinks sales had risen 10pc and the business had seen its tenth quarter of underlying sales growth.
However, on Thursday evening, when Starbucks reported a 13pc jump in first-quarter profits to $432.2m (£274m), it did not give any details about how the UK business performed.
A spokesman declined to say why it had not provided more detail. Of the broader region of Europe, the Middle East and Africa where like-for-like sales fell 1pc the group said: “We have seen growth in revenue, transactions and the bottom line despite continued economic challenges facing all businesses in the region.”
Starbucks’ decision to keep the performance of its UK business under wraps came just hours after David Cameron took another apparent swipe at the amount of UK corporation tax it paid.
The Prime Minister told the World Economic Forum in Davos that multi-national companies should “wake up and smell the coffee” on tax.
He claimed the public had had enough of companies that sell in the UK but use “ever-more complex tax arrangements abroad to squeeze their tax bill right down”.
Starbucks, which says it pays low taxes in Britain because its stores are loss-making, bowed to public pressure in December when it said it would pay £10m annually in corporation tax over the next two years, even if it records a loss.
The group is in the process of closing some UK stores in an effort to improve the company’s operations.