What is independence?

February 24th, 2013

The recent coverage of Harris and Hoole has made for interesting reading. Coverage ranged from the laudable to the laughable.

The one sentiment that popped up repeatedly was the idea that Harris and Hoole were being disingenuous by pretending to be an independent.  This raises, in my eyes, a rather interesting question:  What exactly is independence?  What is it that Harris and Hoole were considered to be doing that they shouldn’t have been?

Looking at the comments it appears they have been committing the cardinal sins of:

- Fitting out their shops nicely, and not in an identikit kind of way.

- Brewing the coffee properly on quality equipment.

- Sourcing good coffee to brew and serve.

- Not plastering the place from top to bottom in Tesco’s branding

Essentially pretending to be an independent is simply not acting like other multi-unit operators in the sector like Starbucks, Costa and Caffe Nero.  Unfortunately this point of view can easily expose one’s own hypocrisy.  I’ve railed against the homogenous high street throughout the UK, the fact that everywhere I went the experience was pretty much identical, and pretty low in quality to boot.  There are always going to be nationwide operators in any segment, and I certainly can’t complain if they start acting a little more sympathetically to their surroundings, or not cutting corners on fit-out or ingredient and preparation.  (There are always going to be multiple unit operators because scaling is one of the very few ways to make selling cups of coffee adequately profitable – but this is a subject for another day!)

In the past I’ve defined independence through access to capital for expansion.  “Independent” is an incredibly annoying term to use and define, but I think access to cash is at the root of just about everyone’s definition.

People seemed angry about Harris and Hoole because they felt like they were lining the profits of Tesco, which has more than enough money already.  People were indicating that their decision-making about which coffee shop to frequent was massively influenced by who they considered the ultimate beneficiary was.  This is extremely interesting in and of itself.  However, it quickly leads us into murky waters again. Every business requires startup capital – should part of a businesses identity be where this money came from.  We like the plucky underdog in this country, and we do love to cut down the tall poppy.  This would imply that people should avoid taking on serious investors (as they’ll expect a return, which of course will result in the destruction of quality because any form of profitability obviously requires “selling out.”) [1. I am hopeful that people's sarcasm detectors are turned on here....]

Yet, if we truly want independent entrepreneurs to have a greater chance of success, or even limited profitability, then surely we should encourage them to take on sufficient funding that they can open a business capable of that.  (This is yet another topic for another day.)

This other Guardian piece on Harris & Hoole in the Guardian was somewhat annoying, or mildly amusing – depending how satirical you take the tone to be.  One particular sentence tickled me – talking about how you can spot a corporate business pretending to be an independent one:

Low prices is another, since one of the main advantages of corporate ownership is improved negotiating power with suppliers.

Seems like this might work with anything but coffee.  Our industry’s tendency towards a kind of false competitive pricing – where an independent with limited buying power prices the product comparably to a multiple outlet, or even multinational, competitor.  In the short term this seems sensible, but of course the long term effect is that the consumer doesn’t see pricing being a suitable differentiator of quality, and the business doesn’t make enough profit to be sustainable.

(One day I promise I’ll stop ranting about this stuff – perhaps when our industry doesn’t have one of the highest failure rates of new businesses.)

In Summary

This post isn’t really about Harris and Hoole.  It is about how consumers perceive our business.  We talk a lot about the things we think matter in the decision making process when someone chooses a coffee shop:  location, quality, convenience, price and brand are all discussed.  We don’t really talk about how the financial transactions involved actually make people feel.  We don’t talk about what people expect of the financial transparency of a coffee shop.

Has the independent coffee shop culture sold an image of the independent coffee shop as a begging bowl, a place to spend away our guilt over how we much most of us spend with corporate giants like Amazon, Tesco, Walmart or Coca Cola?

Will this image turn from a boon to a shackle as we try to professionalise our industry, in the hopes of making it financially sustainable?

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