Starbucks' familiar chunky white mugs will disappear from its British stores this year as part of a major rebranding exercise that will also see the American company drop its name from its well-known logo.

The revamp will make the face of the woman who appears in the logo – known as the "Starbucks siren" – bigger and dispense with the white-on-green lettering that surrounds her. Chief executive Howard Schultz told staff tonight that the rebranding was a "meaningful update" that fitted in with Starbucks' plans to increase its groceries business, which already sells branded tea and ice-cream in supermarkets.

Schultz returned to the helm of the coffee chain in 2008 after sales stalled during the recession and identified that one of the problems was the "commoditisation" of the brand, which in the past has been a target for anti-globalisation campaigners. He has since led a successful turnaround that saw nearly 1,000 stores close, mainly in the US, and has introduced a series of innovations including a new customer loyalty programme and the launch of its instant coffee brand Via.

Starbucks has 700 shops in Britain. Its UK managing director, Darcy Willson-Rymer, denied that the subtler approach to branding reflected a desire to look less corporate as consumers tire of identikit high streets: "We are not trying to be something else – we are definitely trying to look like a Starbucks," he said. "The number one letter in my postbag [says] 'please can I have a Starbucks in my area?'."

The big heavy mugs used in stores, which Willson-Rymer said had become a "bit dated", are being replaced with bone china as the company responds to increasingly sophisticated coffee consumers and tough competition on the high street.

Starbucks would not say how much is being spent on the overhaul but in Britain alone some 140,000 cups will be replaced. The new tableware will start arriving in March, when the new branding will also begin to appear.

This will not be the first makeover the Starbucks siren has received. Her image has been cropped several times: she was originally topless, with her mermaid's tail on show.

The company has also brought its store design in-house and will bring a series of new formats to Britain this year, including its first small "neighbourhood" store in London's Soho, which will boast a restored Georgian facade. It will also open its first "walk-through" store on Borough High Street in east London, which will have no seats and will be just 17 feet wide.