Aussie coffee start-up Harris+Hoole under fire over Tesco investment

A trio of London-based Australian entrepreneurs has been forced to defend its coffee shop start-up Harris+Hoole for giving the image of an independent chain while being part-owned by UK retail giant Tesco.

Andrew, Nick and Laura Tolley – siblings from Bermagui in NSW – opened Harris+Hoole in London in August last year.

Nick Tolley has said he struggled to get a decent cup of coffee when he came to London in 2006. It was for this reason he decided to set up Harris+Hoole, described as a “family affair”.

But after struggling to secure funding from British banks, Tolley said he had no choice but to approach Tesco for more than $3 million.

Tesco agreed to put up several million for a 49% stake in the business. The rest is owned by the Tolleys.

The funds allowed the Tolleys to purchase 13 branches of collapsed greeting card chain Clinton Cards. To date, 10 Harris+Hoole coffee shops have opened across London and in other areas.

But critics have now accused Harris+Hoole of acting as a stalking horse for Tesco, with some disgruntled customers reportedly suggesting it should be boycotted to combat the rapid spread of the successful supermarket chain, dubbed “Tescopoly”.

Katy Smith, a Harris+Hoole customer, told The Guardian: “I don’t really like Tesco. I don’t shop in Tesco. Now I’m in one of them.”

“They’ll probably be on every high street soon. I would avoid it, like I avoid Starbucks and Costa, which I thought I was doing today – putting money back in the community.”

Nick Tolley told the London Evening Standard he appreciates there are “a lot of people out there who have got it in for Tesco” and “see this as a ruse”.

“But nothing could be further from the truth,” he said.

“Tesco has been good enough to help out with the finance but everything else, including the culture and the values of the business, are down to me, my brother and my sister.

“I’m not naive enough to think people will struggle to make the link with Tesco, but they’ve been nothing but supportive.”

Meanwhile, Tesco chief executive Philip Clarke has offered a detailed explanation of Tesco’s investment in Harris+Hoole, which has “flourished” since its launch.

“We invested in Harris+Hoole after meeting entrepreneur Nick Tolley and his siblings Andrew and Laura, who are passionate about great coffee,” Clarke said in a blog post on Tesco’s website.

“They were looking for a company which could back their vision to bring quality coffee to a wider audience, and we were impressed with their energy and enthusiasm.

“We thought customers would love the coffee and the warm, friendly atmosphere of their shops, so we decided to invest.”

Clarke admitted the Harris+Hoole brand will appear in some Tesco stores “when the Tolleys are ready”, but will not undergo a rebranding exercise.

“Some people have asked why it’s not branded Tesco. The H+H brand is part of its value – its distinctiveness and appeal,” he said.

“It’s the Tolleys’ business, their brand. Our investment helps them to take it further.”