Supermarket defends 49% stake in new high-street chain of coffee shops Harris + Hoole
“I thought: ‘That’s very brave, opening up next to Starbucks,'” Bridget Chappell, a full-time mum, said of Harris + Hoole, a new coffee shop in north London next door to a branch of the US behemoth and four doors down from a Costa Coffee.
“I like to try independent shops, and it was really very nice with great coffee,” she said. “But when I got home, I looked it up and discovered it was a chain.”
Chappell is one of a growing number of Harris + Hoole’s customers discovering that the new, independent-looking, stripped-back coffee shops popping up on high streets across London and the south-east are part of a chain that is up to 49% owned by Tesco.
“I avoid Starbucks because it’s a big chain and it avoids tax,” said Carol Levine, 50, a Crouch End physiotherapist enjoying her lunch break in Harris + Hoole. “Now I find this is Tesco … It looks like a small indie. It is disingenuous. It makes me upset. I feel duped. I don’t go in there [Tesco]. It is taking over the world. If it [Harris + Hoole] had been called Tesco Coffee, I wouldn’t have come in.”
Katy Smith, another Harris + Hoole customer, said: “I don’t really like Tesco. I don’t shop in Tesco. Now I’m in one of them. They’ll probably be on every high street soon. I would avoid it, like I avoid Starbucks and Costa, which I thought I was doing today – putting money back in the community.”
Harris + Hoole, named after coffee-loving characters in the Diary of Samuel Pepys, has opened 10 coffee shops in and around London, in locations such as Amersham, Twickenham and Walton-on-Thames, since August. It has plans for many more.
The chain has met opposition to its plans to convert more failed Clinton Cards shops. In Whitstable a petition has been started, along with a Facebook protest group and letter writing campaign. Last year, protesters gathered outside the town’s former Clinton Cards store – which Harris + Hoole has applied to convert into a coffee shop – with Tesco carrier bags on their heads.
“We’re a town which is very dependent on our visitors. They like our independent shops; the influx of chains drives rents up, potentially changing the nature of the town,” said Brian Hitcham, owner of Oxford Street Books in the town and founder of the Save Whitstable Shops Facebook campaign. “Tesco … want the cream of everyone’s cake. Now they have their sights on coffee. All Tesco does is suck money out the town.
He added: “It’s wrong because their whole strategy is to try and create the image of a small independent coffee shop. [The majority owners of Harris + Hoole] are quite happy to get into bed with Tesco, who are funding their expansion, but they don’t seem to prefer to have the Tesco brand bandied about because it will spoil the independent look.”
Feyzan Ulker, owner of My Kind of Coffee, an independent coffee shop down the road from Harris + Hoole in Crouch End, agreed. “Tesco isn’t stupid. They don’t want their name to be part of the name [over the door of the coffee shop]. They know it doesn’t match with artisan values they are trying to make money out of. It is cheating. It’s lying.”
The lead barista at Harris + Hoole Crouch End said she didn’t feel “comfortable” answering questions about whether or not Harris + Hoole is independent.
“As you know, it’s delicate,” she said. “Any question of that sort we tend to say, ask the office.”
She said head office had instructed her to make the store feel as independent as possible. “We try to be independent. We want to be independent. We want to have that feel.”
There is no mention of Tesco’s non-controlling minority ownership on Harris + Hoole’s menus or in the stores. On its website, it states: “Harris + Hoole is a family affair” and shows snapshots of Australian siblings Nick, Andrew and Laura Tolley, who own the majority stake and founded the existing Taylor Street coffee chain in London.
It’s only when you search deeper into the site you find the admission that: “To be able to provide the high street with fantastic coffee takes investment and backing, and few people know the high street better than Tesco – who have made a non-controlling investment in the new business to allow the Tolleys to realise their dream.”
At the opening of the company’s 10th coffee shop in Rickmansworth last month, Nick Tolley, Harris + Hoole’s chief executive, repeatedly denied that he was trying to hide Tesco’s financial interest. “If you Google it, you’ll find it. Go to our webpage – it’s not hidden,” he said. “Putting it any more prominently would not reflect who we are as a business.”
He added: “It’s not some kind of subterfuge to mask ourselves as something we’re not.”
Tesco said that it was investing in “the entrepreneurial founders of a new venture and taking a non-controlling stake”. It stated: “The Tolley family will decide the business strategy. The coffee industry is growing as a whole and Taylor Street is a successful artisan coffee shop business with a loyal and thriving customer base and we support their vision to bring premium coffee to a wider audience.”
Tolley said Harris + Hoole was “trying to create a shop that’s local to the community”. He said localism was so important that one of store managers’ key performance indicators used to determine the level of bonus payments would be based on the “extent to which they are part of the community”.
He said: “The intention is to have the values of an independent, and behave like an independent.”