Tesco's "indie" coffee shop should worry defenders of capitalism

Free markets rely on informed choices, and those seem lacking in the case of Harris + Hoole.

There's been a lot of chatter about an article in today's Guardian (by which, I guess, I mean that I've been talking about it a lot). Headlined "Customers criticise 'indie' image of the coffee shops part-owned by Tesco", it details the reaction of customers in North London to their discovery that Harris + Hoole, an independent-looking coffee shop, is actually part of a ten-branch chain, of which 59 per cent is owned by Tesco.

Rupert Neate writes:

"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."

The people who are shocked to learn that they've just had a pleasant cup of coffee at a shop part-owned by Tesco have come in for a fair amount of criticism. After all, they clearly don't care about anything that matters, otherwise they'd have been unhappy before they learned the technical fact of the shop's ownership.

More to the point, this is supposed to be what capitalism's about, right? Tesco has identified a desire that customers have, and joined forces with a coffee chain to provide that desire. As the lead barista tells Neate:

We try to be independent. We want to be independent. We want to have that feel.

The question which no-one seems to have addressed is what it is that the customers actually desire. If what they want is an independent-feeling café, with mismatched furniture, blackboards for the menus and stacks of hand-made sandwiches, then Tesco can fulfil that need. But if what they desire is an actual independent café, then Tesco can't profit from that desire without the customer being mislead.

That's not to say that Harris + Hoole is necessarily to blame for those customers' mistake. As its chief executive tells the Guardian when asked about Tesco's stake:

If you Google it, you'll find it. Go to our webpage – it's not hidden. Putting it any more prominently would not reflect who we are as a business.

We can't know conclusively whether customers do desire independence or an independent feel, but my hunch is the former. That's certainly what the three interviewed in the Guardian piece claim, anyway.

The problem is, if you desire independent coffee, that's a relatively tricky desire to satisfy conclusively. You could research the corporate ownership of every coffee shop you go in to, but that would get difficult the first time you needed coffee in a strange city with no internet access. As a result, people have developed proxies to work out whether somewhere is part of a chain or not. Blackboards, mismatched furniture, hand-cut food: these things don't normally scale to a big chain, and so are usually a good indicator that somewhere has at most a couple of branches.

It may not seem that important, but it's pretty key to the claims free markets have for being an efficient way to run things that, when people think they are handing over money for a specific reason, they are in fact doing so. That's why we ban calling something organic when it's not, or slapping a union flag on Danish bacon. That even stretches to things which, in your opinion, may not be a choice that matters. Homoepathy is bunk, but it still would be bad for capitalism if anyone could put "approved by 90 per cent of homeopaths" on their sugar pills without that actually being the case.

But unfortunately for these specific customers, Harris + Hoole didn't mislead them. Purposefully or not, making yourself look like an indie coffee shop is not the same thing as telling customers you are an indie coffee shop.

If ethical consumerism is your bag, you're going to have to start putting a lot more effort into making sure you're doing it right, because these things are only going to get more common.

Baristas take part in a latte art competition. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Getty Images.
Show Hide image

Why the Labour rebels have delayed their leadership challenge

MPs hope that Jeremy Corbyn may yet resign, while Owen Smith is competing with Angela Eagle to be the candidate.

The Eagle has hovered but not yet landed. Yesterday evening Angela Eagle's team briefed that she would launch her leadership challenge at 3pm today. A senior MP told me: "the overwhelming view of the PLP is that she is the one to unite Labour." But by this lunchtime it had become clear that Eagle wouldn't declare today.

The delay is partly due to the hope that Jeremy Corbyn may yet be persuaded to resign. Four members of his shadow cabinet - Clive Lewis, Rachel Maskell, Cat Smith and Andy McDonald - were said by sources to want the Labour leader to stand down. When they denied that this was the case, I was told: "Then they're lying to their colleagues". There is also increasing speculation that Corbyn has come close to departing. "JC was five minutes away from resigning yesterday," an insider said. "But Seumas [Milne] torpedoed the discussions he was having with Tom Watson." 

Some speak of a potential deal under which Corbyn would resign in return for a guarantee that an ally, such as John McDonnell or Lewis, would make the ballot. But others say there is not now, never has there ever been, any prospect of Corbyn departing. "The obligation he feels to his supporters is what sustains him," a senior ally told me. Corbyn's supporters, who are confident they can win a new leadership contest, were cheered by Eagle's delay. "The fact even Angela isn't sure she should be leader is telling, JC hasn't wavered once," a source said. But her supporters say she is merely waiting for him to "do the decent thing". 

Another reason for the postponement is a rival bid by Owen Smith. Like Eagle, the former shadow work and pensions secrtary is said to have collected the 51 MP/MEP nominations required to stand. Smith, who first revealed his leadership ambitions to me in an interview in January, is regarded by some as the stronger candidate. His supporters fear that Eagle's votes in favour of the Iraq war and Syria air strikes (which Smith opposed) would be fatal to her bid. 

On one point Labour MPs are agreed: there must be just one "unity candidate". But after today's delay, a challenger may not be agreed until Monday. In the meantime, the rebels' faint hope that Corbyn may depart endures. 

George Eaton is political editor of the New Statesman.