Tesco chief Philip Clarke offered a detailed explanation regarding the retail giant’s investment in the UK coffee chain Harris+Hoole, after receiving severe criticism for the move from shoppers who said they felt cheated after visiting the coffee shop, which they thought was an independent business.
Coffee shop chain Harris+Hoole has the appearance of an independent business rather than one 49% owned by the retail group. Harris+Hoole launched last summer and has 10 shops in the South East.Philip Clarke said about the Harris+Hoole business that run by entrepreneurs Nick, Andrew and Laura Tolley and that Tesco invested in the business because “they were looking for a company which could back their vision to bring quality coffee to a wider audience”.
The investment was similar to Tesco’s backing of Scottish garden chain Dobbies and Islington bakery Euphorium, Philip Clarke elucidated. He further added that Tesco likes backing great brands, helping them to grow and to realise their potential. The Tesco CEO reasoned out why the coffee chain does not have Tesco branding, saying, “The H+H brand is part of its value – its distinctiveness and appeal. It’s the Tolley’s business, their brand. Our investment helps them to take it further.”
When asked what benefit does Tesco derive from the Harris+Hoole investment strategy, Philip Clarke said, “When the Tolleys are ready, we will put them into some of our stores. They will have proved that their brand and their offer work, that customers like it and it will be another reason for customers to shop with us. We will back businesses in which we see an opportunity for their brands to grow with ours.”
Meanwhile, Tesco’s core grocery sales outdid Sainsbury’s, Asda and Morrisons in the run-up to Christmas, marking a turnaround in its UK business, registering a 6.7% rise in food and drink sales over the four weeks to 23 December. Comparatively, Asda grew 3.7% and Sainsbury’s rose 3.3%, while Morrisons saw sales fall by 0.6%.