Local coffee shop shuts its doors, blaming free Waitrose giveaways
A local café has gone out of business after six years of trading, pointing the finger of blame at its neighbour, Waitrose.
A sign (see image below) was left in the window of Central Bean Coffee House, on Osborne Road, which read: “We would like to give a big thank you to our customers but sadly we can no longer compete with Waitrose and their FREE coffee…”.
Speaking exclusively to JesmondLocal, Oliver Vaulkhard, managing director of the Fluid Group, which owns Central Bean’s Jesmond branch and two others in the region, explained how closure had been a concern since Waitrose opened in 2011. “We traded profitably for three years but when Waitrose opened we saw a slight dip. As they got busier we lost trade and four or five months ago they put another free drinks machine in.”
Waitrose offers one free cup of tea or coffee to holders of the ‘myWaitrose’ loyalty cards. The Financial Times reported that the supermarket give away one million beverages a week and linked this to Waitrose’s recent drop in profits (although Waitrose have disputed this correlation elsewhere). A spokesperson for the retailer expressed sadness at the news but pointed out to JesmondLocal that “offering a complimentary beverage is nothing new; it’s what many businesses have done for years.”
This case re-opens the debate around the negative impact large outlets have on the prospects of smaller local businesses. Vaulkhard gave a sense that Central Bean was powerless in the face of a large outlet offering a service they couldn’t possibly match. “You can go in [to Waitrose] and see people queueing for coffee,” he explained. “Free coffee is hard to compete with even when the coffee isn’t as good!”
That said, it would be inaccurate to portray Central Bean as an independent outlet lacking financial backing. It is owned by the Fluid Group, which owns a number of popular businesses in Newcastle, including the popular nightclub Perdu and Grey Street haunt Barluga as well as two other Central Bean cafes. However, when pitched against Waitrose, which is owned by the John Lewis Partnership, Fluid Group clearly emerges as the underdog, especially when you consider the diminutive size of the Jesmond cafe.
This case is symptomatic of the new reality of the supermarket industry. Waitrose said that in “an increasingly challenging market place” their free drinks policy “helps us to give people a reason to shop in Jesmond rather than go elsewhere.” The planned new Sainsbury’s, which JesmondLocal reported on last week, may prove further competition for Jesmond shoppers’ pounds.
Vaulkhard was magnanimous at the closure of his store. “I don’t have any great ill feeling to them,” he explained. “I’ll still shop there. It’s just a shame our little coffee shop is gone”. He also told said that the Fluid Group had no contact with Waitrose over this issue. “It’s a national policy, we’re a tiny shop on the corner. We’re the least of their concerns I’d imagine”.
Vaulkhard also revealed that an agreement was reached last week regarding the future of the central Jesmond location. The new owners are “a family who have lived in Jesmond all their lives” and have “global” retail experience. Designers are already at work on the new business and a new outlet could open as early as the beginning of next year. As well as wishing the new owners “all the luck in the world,” Vaulkhard told JesmondLocal that The Fluid Group is looking for a new, bigger site to continue their business activities in Jesmond.