Starbucks: Customers ‘incredibly loyal’ despite tax avoidance fallout

MWL: Starbucks claims that listening to customers and maintaining brand integrity through its business values has meant its customers have remained “incredibly loyal” after the negative media coverage surrounding the allegations the coffee chain avoided paying corporation tax.

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Speaking to Marketing Week following his talk at the Marketing Week Live conference today (27 June) Starbucks vice president of marketing and category in the UK and Ireland, Ian Cranna, said: “I can say that throughout the whole period our customers have been incredibly loyal.”

“Throughout this period we’ve done what we’ve always done, listened to our customers and employees and taken actions that are based on that and that are true to our values as a company.”

Starbucks was accused of tax avoidance at the end of 2012 and became the subject of protests and boycotts after the media widely reported the fact the company paid only £8.6m in corporation tax since its launch in the UK in 1998 and paid none since 2009, despite generating £1.2bn in revenue in the UK over the last three years.

In response, Starbucks which has 746 stores and employs 9,000 people in the UK, volunteered to pay £20m in tax over two years and made its first payment last week.  

Cranna spoke to the Marketing Week Live audience about maintaining brand integrity through the culture and values of the company, one of which is a commitment to the neighbourhood and community the brand operates in.

He said: “I’m quite aware as I’m standing here talking about values of the fact that we have been in the media quite a lot recently for corporation tax. Don’t worry I’m not going to go into details of international corporate structures and the complexities of taxation but what I do want to talk about is how we used our values to make our decisions and our responses as we navigated ourselves through the last six months.”

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