A 40-year high inflation rate and an economic downturn in the U.K. economy has Starbucks contemplating the sale of its business in the country.
According to The Times, the coffee giant is currently in talks with advisers to determine the value in selling its U.K. business, which it launched back in 1998.
While Starbucks denied any plans to sell its business in the country, it would not be a complete surprise if the reports were indeed true. Inflation in the U.K. reached 9.1% in May, higher than any of the other G7 countries.
To make matters worse, it is expected to surpass 11% later this year, CNN Business reported. Coping with rising inflation has meant consumers have less disposable income in their pockets.
The rise in inflation has also directly impacted food prices, which, of course, has a significant effect on businesses such as Starbucks.
Another critical factor that is likely pushing Starbucks to explore a sale is the gloomy outlook of the U.K. economy. In the words of the Bank of England, U.K.’s economy has “deteriorated materially.” And next year, the country’s economy is expected to stagnate at a zero percent growth rate.
The Seattle-based coffee company currently operates 300 stores in the U.K. in addition to 800 licensed stores.