Starbucks Thrives in the UK and Tea Suffers

Years ago I remember listening to the pundits who said that Starbucks wouldn’t make it in the UK – a country where tea was the default beverage of choice. But Starbucks is proof that just because a market appears predisposed “not” to like your product, that doesn’t necessarily mean they won’t like your product. Habits change and every new generation likes to set itself apart from the generation that came before.

Deborah Ball of The Wall Street Journal wrote a good article on the impact that Starbucks is having on tea sales in the UK. According to the article…

    Starbucks coffee has invaded England, upsetting the tea cart in a country famous for its afternoon tea. London already has some 200 Starbucks outlets, surpassing New York City, which has 190. All told, there are 466 Starbucks in the United Kingdom, as well as many fast-growing local chains with such names as Caffe Nero and Coffee Republic. Meanwhile, U.K. tea sales have declined 12% in the past five years, according to market-research firm Mintel.

And here’s an interesting cultural tidbit:
,ul>For Starbucks Corp., the British are ideal customers because about 80% of them stay in the store to drink their coffee. That gives Starbucks a chance to sell them food, says Martin Coles, president of Starbucks International. In the U.S., by contrast, 80% of the customers buy their drinks and leave.

So now Starbucks is going after China, another market known for its love of tea. Based on anecdotal feedback so far, the company is doing quite well there as well.

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Author: John Yunker

John co-founded Byte Level Research in 2000 and is author of The Web Globalization Report Card. He also co-founder of Ashland Creek Press.