Starbucks tax offer 'too little, too late' for UK consumers

Starbucks tax offer 'too little, too late' for UK consumers

LONDON - Despite pledging to pay millions of pounds in extra tax in Britain, Starbucks faces a battle to restore its reputation over its fiscal stance, with analysts saying the offer is "too little too late."

With 760 Starbucks outlets dotting Britain, coffee lovers need not travel far to find the familiar green signage and grab a frothy latte or a flat white.

But surveys suggest British consumers may be losing appetite for the US chain following the revelation last year that it has paid just £8.6 million (S$16.7 million) in British corporation tax since 1998, despite generating £3 billion in revenues.

The revelations sparked a stream of negative publicity plus protests outside coffee shops which analysts say hit the brand hard, though Starbucks itself insists "UK customers have remained loyal."

Under the weight of pressure from lawmakers and consumers, the company pledged in December to pay an additional £20 million in corporation tax over two years.

But Sarah Murphy, director of market researchers YouGov BrandIndex, said the offer "has done little to slow down negative sentiment surrounding the brand."

BrandIndex has tracked public perception of the coffee giant over several months. Its "Buzz" index gives companies a score based on what people have been hearing about the brand, with zero representing equal levels of positive and negative.

In early October Starbucks' Buzz score stood at +1.9, but this plummeted to 28.4 following the tax headlines, and reached -45.2 in mid-December.

"That was quite a significant decline," said Murphy, adding that measures of perceptions of Starbucks' quality and value also sank during that time.

In November, Britain's parliamentary accounts committee grilled top executives from Google, Amazon and Starbucks over their tax affairs.

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