Saturday, 7 March 2015

Irish Coffee, Sir?

It was a sign of the times that the long-running US sitcom Friends saw the main characters socialising in a coffee shop rather than a bar. It began showing in 1994 and, since then, coffee shops have enjoyed exponential growth and become a standard feature of most British High Streets.

Personally, I have never seen the point, but their success is undeniable. I would say they have created their own market rather than taking existing trade from pubs – they come across as welcoming, unthreatening and, dare I say it, female-friendly. A coffee shop is basically a window on the world, whereas a pub is a refuge from it.

Now, the market-leading operator Starbucks have announced that they are going to roll out the sale of alcohol in some of their UK outlets, following successful trials in the US. It’s part of an “evening concept” that also includes serving more substantial meals. I can’t imagine that Tim Martin will be quaking in his boots, but it’s easy to see the appeal to tourists wanting a pre-theatre snack, or office workers enjoying a glass of Chardonnay after work before getting the train home.

It’s another example of how the on-licence scene is fragmenting and diversifying. We now have large numbers of bars in former shop premises, micropubs, bottle shops with in-house bars and fully-licensed “bar and restaurant” operations. It’s becoming less and less true that you need to go to a pub to have a drink outside the house. However, I would say that trying to ape coffee shops is about the worst thing pubs could do.

But, if you do want an Irish Coffee, you’ll be disappointed, as they’re not planning to serve spirits. But perhaps liqueur coffees would be a good sales tactic...


  1. To attempt to give the question an answer, wouldn't it depend on whether Starbucks attracts customers who would otherwise go to the pub or whether it attracts new punters who wouldn't go in a pub and for whom this offer is an attraction?

    As the demographic of the perfect Mudgie pub is miserable Daily Mail reading old codgers sipping boring brown bitter in silence, without music or TV, I'd say Starbucks are serving an entire different clientele.

    As not every member of society is a miserable old codger, there is probably room in the market for all types of places to suit all types of people.

    The bright young things will one day age and may become miserable old codgers, and eventually gravitate to the type of place people like yourself enjoy.

  2. I’m not a fan of Starbucks, preferring instead Costa Coffee if I fancy a coffee. Starbucks reeks of West Coast pretentiousness. They refer to their staff as Baristas, in order to confer a bogus Italian theme to their outlets, and take this to ridiculous levels with all sorts of fancy names for their over-priced coffee. Try going in and asking for a coffee; the look on the faces of the staff is priceless.

    Anyone who saw Starbucks UK CEO being grilled by the House of Commons select committee, over their non-payment of tax in this country, will know what a slippery bunch of shysters they are. The coffee for all their European outlets is traded through Switzerland, although this is a paper exercise only, and no coffee physically moves through that country. They pay their taxes through either Belgium or Holland, (I can’t remember which), where tax rates are low. Their CEO even claimed the company has “intellectual property rights” for its coffee concoctions – yeah right, it’s a cup of coffee ffs!

    As you say Mudge, they are “female friendly”, and yes they are a “window on the world”, full of yummy mummies, sipping their tall-skinny lattés, whilst stuffing their faces with cream cakes. No threat at all to the pub trade, as far as I am concerned.

  3. Paul, Starbuck's don't "trade all their coffee" through Switzerland, nor do they "pay their taxes" in respect of their UK operations in other jurisdictions. You're just talking ill-informed nonsense.

    They pay all the same taxes other companies operating in the UK do - VAT, business rates, employer national insurance contributions etc - with one exception being corporation tax. That's because they're operating through companies domiciled in another jurisdiction. It's perfectly legal. Yes, the motivation is to pay a lower rate of corporation tax on the final profits they make. That's just good corporate governance.

    If people really have an issue with companies doing this sort of thing then we need an international convention on harmonisation of corporation tax rates across the globe. I don't think it would succeed. In any event demonising companies is stupid, populist, leftie tosh.

    I fucking hate Starbucks, by the way. Costa is nearly as shit. Go to a good independent.

    1. The problem with Starbucks was they were saying to the taxman that the UK operation made a loss whereas saying the opposite to investors. They do this by way of various methods such as trading the coffee through Switzerland (where they don't have to publish accounts), paying for IP rights, and intra company loans. It's not leftie tosh to object to this.

  4. Not sure about that Jeff. In a moment of utter boredom, I watched part of the televised recording of the grilling the Commons select committee gave the Starbucks CEO. Perhaps the MPs got their facts wrong, but the head honcho didn’t exactly contradict the trading coffee through Switzerland story.

    I understand what you are saying about corporation tax and good corporate governance and accept that I was letting my heart rule my head, but the simple fact remains, I really don’t like Starbucks!

    ps. Most of my visits to coffee shops are made whilst waiting for my wife to finish the shopping. Nothing sexist here; she just prefers to push the trolley around the supermarket on her own. I’m not complaining, but the choice of coffee shops is rather restricted where we tend to shop, and there aren’t any independents.

  5. Lord Egbert Nobacon7 March 2015 at 23:40

    I only ever drank my own freshly-ground Mocha Parfait coffee from the Algerian Coffee store on Old Compton Street and I drank it by the bucket-load.
    Starbucks,Costa Coffee and Caffe Nero were all undrinkable milky shite in comparison.
    Since having to give up proper coffee on ticker-related doctor's orders I've searched high and low for a decent decaff and most were pretty awful.
    Until a couple of months ago when I found one in Aldis and it's virtually as good as their house blend proper coffee which is superb.
    Now I get the taste without the collywobbles.

  6. It's all part of the plan for the new world order. Problem, reaction, solution. The Bilderberg group instruct governments to ease the path of globalism enabling companies to operate across states, The tax disparities ensure those companies locate to lower tax regions creating a problem in a Bilderberg created recession. The public react and demand the solution.

    Harmonized taxes with no democratic accountabilty. Taxation without representation as elected governments no longer set tax rates. Another building block of the global government, the new world order.

    Look at the Starbucks logo. It has Illuminati and Bilderberg all over it. The black helicopters are coming, lock and load.

    David Icke warned us decades ago.

  7. As someone that would describe their politics as centre right, the tax arrangements of Starbucks create a competitive disadvantage for UK start ups. A small UK business cannot operate from the caymen islands. A UK accountant is expensive enough to pay for.

    Tax harmonisation is one solution but tends to be a problem. Business does not have a vote and all business tax falls on the end consumer. Therefore the natural trend is for these taxes to rise as voters don't see them. If Brussels set corporation tax it would likely be going up. Tax competition is the only downward pressure.

    My thoughts are that the way business is taxed needs to be rethought, and that corporation tax along with business rates has had it's day.

    Business benefits from the public infrastructure and should make a contribution but currently the big international has a tax advantage over the small start up. Maggie would not have stood for it.

  8. The simplest solution to ensuring tax is paid where the business is done is to collect the tax from the end user. Abolish corporation tax and rep[lace it with increased VAT. But I can't see that being political acceptable somehow.

    And large internationals were once small startups - a single outlet in Seattle for Starbucks - so the situation can't be that unfair

  9. The fancy independent coffee shop near us also sells wine and craft beer. Its a nice idea. the lines between a bar and a coffee shop are blurring. I always wondered why they hadn't already in this country.

  10. And yet, Mudgie, the trade press is always urging pub operators to 'get with' the coffee thing. The GP on hot beverages is brilliant compared to beer. It may not fit in with the spirit of the trad pub, but I'm pretty sure if I was opening a "bar" I'd be all over coffee.

  11. Starbucks, Costa and the like did something incredible over the past decade. They persuaded people that it is normal to pay upwards of £4 for a coffee - something which was previously on sale in any café for about a quid.

  12. Professor Pie-Tin10 March 2015 at 12:00

    The coffee still costs a quid - it's the frothy milk that costs the extra three quid and persuading people to pay for that is the incredible thing.
    That and the stale Italian biscuit.

  13. I go to one coffee shop occasionally which whilst self-consciously uber-artisanal does make a good cup, has nice people and is cheaper than Starbucks. I was moderately excited to find they had obtained a drinks licence - until I saw the prices. £4.50 for a Brewdog, £5.00 for a Williams. In a small post-industrial town. (And with a 'spoons about two minutes walk away.) Er, no thanks. I'll have my coffee and buy three bottles on the way home for that price.

  14. Professor Pie-Tin14 March 2015 at 09:30

    What were the final results of the election poll ?

  15. On second thoughts I decided it was a bit premature, so I'll bring it back closer to the election. You can see the interim results here.

    I'll avoid mentioning it on Twitter as the last time I did that it was rather enthusiastically over-shared which distorted the result.


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