UK – Multinational coffeehouse chain Starbucks has announced the acquisition of its largest licensed franchise partner, 23.5 Degrees.

The acquisition adds 113 wholly-owned outlets and 1,650 employees to the brand. It brings the total number of company-owned locations in the UK to 500.

23.5 Degrees was Starbucks’ first UK franchised business partner, opening its initial outlet in February 2013, fifteen years after it opened its first location in the UK in 1998.

According to Starbucks, the move marks a significant step in the expansion of its company-operated outlets in the UK.

The move is part of the chain’s strategy of consolidating operations amid promising performance in the region.

In late March, Starbucks reported a 22% year-on-year (YoY) increase in sales in the UK for the year ending October 2023, reaching £547.7 million (US$693 million).

Gross profit for the period also increased by 15% to £149 million (US$188.5 million). According to Starbucks, this gross profit increase was largely influenced by new store openings.

This positive performance was recorded despite a period of turbulence for the coffeehouse chain, which recently replaced its chief executive Laxman Narasimhan, after less than a year in the job, with former Chipotle CEO Brian Niccol, following a 3% slump in global sales in the reported period.

Alex Rayner, Starbucks UK, Switzerland, and Austria General Manager, said, “I want to acknowledge the important contributions of 23.5 Degrees and the dedicated green apron partners. This strategic move will enable us to enhance our investment in new locations, elevate our in-store experience, and drive innovation for our UK customers.

According to the GM, the acquisition’s decision was attributed to what he describes as an impressive loyalty membership increase in the UK, now at 1.2 million members, and a surge in cold beverage orders.

The acquisition eases the company’s efforts of implementing improvements to customer service, HR management, and other core business operations.

This consolidation of operations is especially beneficial for the company following significant investment in its drive-thru network in the UK. The company has opened 340 drive-thru sites in the UK, mostly pivoting on high-footfall city locations.

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