Starbucks, the world’s largest coffee shop chain, is cutting its US expansion plans after second-quarter profits plunged 28 per cent on continuing consumer cutbacks in the face of rising food and fuel prices.

Howard Schultz, chief executive of Starbucks, also admitted that for the first time the company was seeing some some fall-off in growth levels in the UK, where its vies with Whitbread's Costa chain and the privately owned Caffè Nero.

In a conference call with analysts, Mr Schultz said: "We did see some early signs of softness in traffic in our UK stores. Starbucks coffee and premium coffee experience has, over time, been an affordable luxury. And at this time, it isn't for some people."

The company, which has described current market conditions as the worst in its 37-year history, said that profits fell from $150.8 million (£75.9 million) in the second quarter last year to $108.7 million, while revenue rose 12 per cent to $2.5 billion.

Starbucks said that it will now look to international markets for growth. The company will open 975 stores outside the US while cutting new store openings in the US back by 155 to 1,020.

Mr Schultz, who returned as chief executive in January, said: “We think it is absolutely the most disciplined and prudent decision to slow the US growth down.''

Starbucks added 266 US stores in the last quarter, and 470 outside the country, bringing the worldwide total to 16,226. By 2011, Starbucks projects having 1,300 stores worldwide and 21,500 overall.

Net income sank to $108.7 million, (£54.4 million) or 15 cents per share, from $150.8 million, or 19 cents a share in the same period last year. Sales rose 12 per cent to $2.5 billion, lower than forecast by analysts.

The shares, which have fallen sharply over the past year, added 0.56 cents - a rise of 3.5 per cent - to $16.79 in morning trading in New York.

Starbucks admitted that revenues have been hit since Mr Shultz took over as he has looked to restructure the company. He intends to close cafes with weak sales and in February, most stores across the US were closed simultaneously as baristas were retrained to make expressos.

Mr Schultz also said that the company will stop serving breakfast sandwiches by the end of September, partly because their smell overwhelmed the aroma of coffee in the cafes. Following the lead of other coffee chains, Starbucks will also be offering a customer loyalty card for the first time.

Starbucks does not break down the performance of individual countries, but his comments about the UK are in contrast with those of Costa, which has slightly more stores than Starbucks in the UK. On Monday, Whitbread reported a 6.5 per cent increase in like-for-like sales for Costa and said it planned to double the size of the chain globally to 2,000 stores over the next five years.

Starbucks UK has just acquired a Little Chef site in St Albans to convert to its third “drive-to” outlet. Its other sites are on the A3 at Wisley and on the A23 near Croydon. It recently unveiled its first "drive-through" outlet in the UK, in Cardiff.

According to M&C Report, the trade journal, Costa is close to securing its first UK drive-through location.

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