Oxford Street rents are so expensive even the mighty Starbucks has decided to get out.
It has hired property agent CBRE to put the leases of its three Oxford Street shops on the market, and will close them when it finds buyers. The move is part of Starbucks’ plans to concentrate on locations off the main streets of the capital, in search of more upmarket, and cheaper, venues.
Starbucks arrived in tea-loving Britain 14 years ago and began an assault on the High Street, taking the best shops on the best streets and paying top rents.
It has been trying to reduce its UK rent bill and has now moved out of Regent Street in favour of three stores in nearby Conduit, Princes and Vigo streets, the last of which will open next month.
Kris Engskov, Starbucks’ UK managing director, told the Evening Standard: “Fourteen years ago when we came to the UK, we needed to be on Oxford Street to build our brand but now people know us we don’t need to be there.”
Oxford Street rents are now hitting £800 zone A — the industry measure for calculating rent.
Steven Stedman, Starbucks’ adviser at CBRE, said: “There is a disconnect between the large expensive stores and the smaller stores on Oxford Street.”
As the rents for the large stores keep going up the disconnect will get bigger.”
Starbucks is opening or refurbishing 70 London stores in time for the Olympics and is creating new store designs to improve the customer experience by encouraging people to spend more time in the cafés.
