An air of suspicion over big business still prevails in the UK, and in some cases it may be justified. But this week saw supermarket giant Tesco fighting to defend its investment in an up-and-coming name on the nation’s struggling high street.
On 5 January, the Daily Mail published a story that seemingly outed “independent” coffee shop Harris+Hoole as “backed by Tesco’s billions”. The article eventually admitted that the Tesco backing amounted to 49% ownership – leaving the running of the business in the hands of sibling founders Nick, Andrew and Laura Tolley. But its tone was definitely an accusatory one… as if Tesco were trying to buy up the high street and pull the wool over consumers’ eyes.
Another article, this time on the Guardian, quoted a number of disgruntled customers who said that they didn’t know it was a chain, and that if they’d known it was a Tesco coffee shop they’d never have gone in.
Tesco naturally felt that it needed to respond, so on 8 January its CEO Philip Clarke wrote a blog post to explain the company’s side of the story.
“We’ve always been upfront about our investment in Harris+Hoole – and so have Harris+Hoole,” Clarke wrote. “We like backing great brands, helping them to grow and to realise their potential. We’ve done it with suppliers for years. Great ideas can find it hard to get backing these days, so we’re pleased to be in a position to help entrepreneurs achieve their vision.”
Should the coffee shop have been clearer that they were part owned by Tesco? Well, the details are available on its website – and most private companies don’t openly advertise who their shareholders are, because there is no legal obligation to do so. As such, this information has been entirely volunteered.
Many consumers probably don’t know who finances the brands they buy, and the reality is that unless big business – whether in the form of banks, pension funds, private equity funds or even supermarkets – is willing to put cash into new ventures, the majority of them would never get off the ground.
Correct us if we’re wrong, but isn’t a funding drought in the realm of major brands a less than desirable scenario?