The business case for the Tesco move into ‘artisan’ coffee shops is clear, but it’s hard to see them beating independents on quality
Coffee appears to be recession-proof. It falls into the marketing category of a “small affordable luxury”. In business terms, coffee shops are highly profitable. Even people who think they can’t afford free-range chicken can easily be persuaded to spend £2-3 of their hard-earned cash on a cup of coffee that would cost them pennies to make at home. Why? Coffee shops have an almost effortless image of cool. That haunting aroma of roasted beans blows an instant breeze of sophistication through any operation.
But how cool can a coffee shop be when it is part of a chain, a chain up to 49% owned by Tesco? That’s right, the supermarket mammoth is investing heavily in a new chain of “artisan” coffee shops, the first opening in Amersham, Buckinghamshire, this month.
If you stumble over the word “artisan” when it appears in the same sentence as Tesco, it may not surprise you to learn that Tesco is showing uncharacteristic reserve over its stake in the enterprise. In fact the chain, quaintly named Harris and Hoole (after coffee-loving characters in Samuel Pepys’s diary), won’t display any information to inform customers of Tesco’s involvement.
Why is Tesco being so bashful? For starters, communities that already feel oversubscribed with Tesco Expresses and Metros most certainly won’t be chuffed to see Tesco taking yet another bite out of high-street commerce. And coffee chains in general are rapidly becoming a downtown planning menace to match the creeping supermarket threat. First it was Starbucks popping up like the proverbial bad penny on every corner. Then it was an army of Costas. The coffee chain assault on our town centres is now so pronounced that both Bristol and Totnes have seen high-profile campaigns – ultimately unsuccessful – to stop Costa opening. And if ubiquitous Costa is getting it in the neck from objectors, omnipresent Tesco, even with a steaming cappuccino in its hand, can expect an even frostier reception.
Of course, it makes total business sense for Tesco to buy into the thrillingly lucrative coffee shop market. Although it is still the biggest UK supermarket chain, this year it has reported its worst sales figures in 20 years, provoking major soul searching at its Cheshunt HQ. The Tesco Extra stores are increasingly seen as white elephants, the Tesco shopping experience is widely acknowledged to be drab and uninspiring, and the chain has taken painful financial hits with its US and Asian operations. Tesco is even considering axing its “Every little helps” slogan, which increasingly jars, and is susceptible to parody, as in “Every little hurts”. So for Tesco, a stake in a business that looks like a rising star, not a juggernaut idling in the slow lane, won’t go amiss.
Of course, it’s not beyond the bounds of possibility that Harris and Hoole will have the theoretical capacity to serve a “damn fine cup of coffee” – the chain will be run by Andrew and Laura Tolley, the Australian siblings behind the aspiring London coffee shops Taylor Street – but this is not a likely scenario. Fine Arabica coffee, however knowledgeably and ethically sourced, has a habit of shedding its winning qualities when made into an amaretto milkshake by casual staff earning little more than the minimum wage.
Truly great coffee shops – think Tazza D’Oro in Rome or Caffè Pirona in Trieste, are one-off indie operations, often family-run. They reflect all the quirks and preferences of the diverse group of people who run them. This authenticity is what gives the best independent coffee shops such timeless appeal, and makes them genuine assets to their area. Never confuse this venerable business model with faux chain coffee shops, stamped out with a corporate template.