Wednesday, 20 January 2016

The (Coffee) Chain Gang

"Please show your support for a decent independent going head to head with the chain that is coffee#1"

The above is a quote from a post on a local Facebook page. The poster is setting up a coffee shop in North Street, Bedminster, having failed to get premises on the Wells Road in Knowle, where he would have done well. He will probably still do well in Bedmo, but will be up against stiffer competition (and not just from 'the chain that is coffee#1').

Now, I've never had a coffee in a branch of coffee#1, so I'm unable to comment on their wares but this comment piqued a certain interest in me. Namely: the tendency of thought that says: small business good, big business bad.

Here's the thing: From my viewpoint, the world is not that simple.

Sharp practice, tax evasion/avoidance and poor treatment of staff can all be found amongst small, local, independent businesses as well as large.

On the flipside, some of the largest businesses in the country/world have exemplary approaches to corporate social responsibility and employee relations.

Reducing things to simple binaries is foolish. We all benefit from a mixed economy with different types and sizes of shops/chains, and a mix of differing ownership models. Do I think there is room for change? Hell yes. But do I think large companies have no good points at all? No.

The post above also reminded me of something that has long puzzled me: at what point does a company go from being 'good' (local, independent) to 'bad' (large, corporate, spawn of the devil)?

Whilst many people set up businesses in order to achieve/sustain a certain lifestyle, many more dream of making it big: opening a second outlet, expanding their offering, maybe taking their services to a neighbouring city. Some dream of going national, or international.

Good for them, it's a natural inclination. Sometimes this will be achieved through organic growth, sometimes they will have to seek additional funding: a bank loan, another investor or (cue pantomime boos) private equity investment.

At what point does their bright, shining example of local success become soiled. When do they cease to be a local business with multiple outlets, say, and become a chain?

When they have more than certain number? When they have spread to multiple towns and cities? When they accept funding from unrelated investors?

Here are a few local(ish) examples - where do you think the line to being a big-bad-chain is crossed:

Cafe Grounded - 7 outlets
Caffe Gusto - 8 outlets (including a concession for staff/visitors to The Engine Shed)
Pieminister - 11 outlets (2 'coming soon') plus wholesale distribution to pubs/cafes and supermarket retail.
Boston Tea Party - 17 outlets (2 'coming soon')
Coffee #1 (started in Cardiff, I believe) - 58 outlets
Loungers - 65 outlets, 3 'coming soon', and 13 Cosy Clubs

(For comparison, Starbucks has c. 800 stores, Costa c. 1,800)

P.S. This was going to be a Facebook status update but rapidly grew too large... obviously not good...

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