07/12/2012 08:17 GMT | Updated 07/12/2012 09:48 GMT

Starbucks' Tax Letter Starts Reputation Damage Reversal, Say Experts

Starbucks has said it will pay £10m in British tax for the next two years, and pledged a renewed pledge to enhance trust with its customers, following a national outcry over the lack of corporation tax the coffee chain pays in the UK.

UK managing director, Kris Engskov, said in an open letter on Thursday that the firm had agreed to pay more than required by law, because "our customers clearly expect us to do more".

The company has 700 British outlets, but claims it has yet to turn a profit, resulting in it paying just £8.6m in corporation tax in 14 years.

"We know we're not perfect. But we have listened over the past few months and are committed to the UK for the long term. We hope that over time, through our actions and our contribution, you will give us an opportunity to build on your trust and custom," Kris Engskob, UK managing director of Starbucks wrote in the open letter.

Will this be enough to persuade the UK public though? Readers may remember the ire sparked by Engskob's last missive - after posting a blog in October to "share the facts" about Starbucks tax payments, more than 100 customers logged on to register their anger.

James Thellusson, a communications consultant who has worked with Barclays, Shell and Deloitte in the past, told the Huffington Post UK Starbucks had weathered the storm in the short term, but the coffee chain should continue to be wary about further reputational damage.

"They fought. Lost the initial media battle. Now they're following the classic three Rs formula: Regret, Review and Remedy. Paying up may help move them out of the spot light. But the issue is a potential reputational 'structural deficit' unless or until they resolve their long term position on paying tax in the UK," he said.

"People care more now than ever before about how company's make their money and what social contribution they make. We live in a climate of contestation. First, we saw executive pay scrutinised. People and politicians challenge company pricing policies. Now, the public eye is moving onto profit and tax.

"Business must work together to promote what it does for society better. They need a public engagement campaign. They also need to put PR and marketing people on the board to alert them to the changing climate of opinion and challenge operational process and policy more if they want to avoid these pitfalls."

Nigel Charlesworth, a communications executive for the Smart Agency, who has previously worked with Northern Rock, the Royal Bank of Scotland and the NHS, said the threat of a customer boycott was "too distracted and fragmented" to have made much of an impact on Starbucks.

"Regardless of the tax u-turn from Starbucks, we were never going to change our coffee-drinking habits on the basis of their moral compass," he told Huff Post UK.

"In Starbucks towers, this will have been a painful decision and against the advice of its legal and tax teams - 'We comply!' they'll have been crying to the board. But Starbucks is playing the long game, and by changing its stance will be hoping the spotlight moves somewhere else.

"When it comes to reputation, we have short memories and anyway, the brand has not been damaged completely. No-one's contracted Legionella from drinking coffee in a branch, so as long as they pull on a hair-shirt and take the criticism on board, apart from paying a bit more tax, Starbucks will grow its presence across the UK."

Has Starbucks done enough to win back your custom? Let us know in the comments below.