Coffee cafes were one of the hottest segments of the U.K. restaurant industry in 2012, with concepts that ranked among the Leading 100 U.K. chain restaurants posting domestic systemwide sales growth of 12.2% (to more than £1.4 billion) on unit growth of 15.4%.
One concept looking to capitalise on this growth—and attracting not a small amount of attention in the process—is Harris + Hoole. The year-old London-based chain, which was started by three siblings, describes itself as “a family affair” and “a new generation of coffee shops bringing an artisan approach and quality direct-trade coffee to High Street coffee.” More notable is the backing behind this home-grown venture: Supermarket giant Tesco has a minority stake in the chain.
As the Telegraph’s Graham Ruddick noted, some observers have suggested that Harris + Hoole’s emphasis on its origin story—local kids make good with a startup coffee concept—is disingenuous, given the chain’s big-name supporter. But Harris + Hoole notes on its website that “to provide the high street with fantastic coffee takes investment and backing, and few people know the high street better than Tesco.”
For Harris + Hoole, the financial support is allowing it to grow rapidly: The chain currently lists 22 locations on its website; a handful of these are on Tesco sites. And Chief Executive Nick Tulley, one of the sibling founders, recently told the Telegraph’s Ruddick that the chain aims to double in size in the next year.
For Tesco, bringing a coffee concept with independent flavour into its stores represents “another reason for customers to shop with us,” CEO Philip Clarke said in a January post on the company’s blog.
As we’ve noted, U.K. consumers look to coffee cafes for a speedy, convenient dine-in occasion. Consumers polled for Technomic’s 2013 U.K. Café Consumer Trend Report estimated that 62% of their coffee-café orders were for in-restaurant consumption—a higher dine-in rate than for bakery cafes (47%) or patisseries (20%)—and they cited location convenience and speed of service as their top two reasons for choosing a particular coffee-café concept to visit.
From that perspective alone, it’s easy to see why Tesco would find appeal in welcoming a local-flavoured coffee-café concept into its stores. Give consumers a chance to enjoy a quick respite from their day in a relaxed-atmosphere café, and then watch them fill their carts inside the supermarket. (Tesco’s newly refreshed store in Watford, opened this month, features a Harris + Hoole unit as well as the company’s first branch of Giraffe, the family-friendly restaurant chain that Tesco acquired in March.) This kind of co-location has a well-established precedent across the pond, too: Minneapolis-based discount chain Target began opening Starbucks units inside its stores more than a decade ago.
Another key finding from Technomic’s café report is that consumers rate loyalty programmes as a significantly more important factor in their selection of a coffee café than in their choice of a patisserie or bakery café. Harris + Hoole, looking to “further enhance (the) H+H experience,” just launched a mobile app for iOS devices that features, naturally, a digital loyalty card as well as a shop locator and a tool that lets customers create and save customised coffee orders.
It will be interesting to see the evolution of this partnership, and of the Harris + Hoole brand. And in any case, the story of this perhaps unlikely teaming offers a reminder that seizing on consumers’ desire for convenience—whether defined by store proximity or by time-saving technology—is a prudent move for coffee cafes large and small.