Companies That You Expect to Disappear Soon

[Bald Rick]

Slightly related to the SSP posts, how long do Costa Coffee have until they start to struggle?

I brought one of the Christmas drinks today, the Toblerone Latte and was charged £4.20 for the privilege, next time I'll stick to Greggs.

At these prices, how long until they price themselves out of the market?

They’ll be fine. They’ll have a couple of years with results below expectations, but their business model (mostly franchises) will be solid. Although why anyone prefers Costa to the competition is beyond me.

 

[skyhigh]

They’ll be fine. They’ll have a couple of years with results below expectations, but their business model (mostly franchises) will be solid. Although why anyone prefers Costa to the competition is beyond me.

Costa is of course owned by Coca-Cola and has around 3500 stores across 30 countries. They will get plenty of revenue in from franchise agreements and there are pretty big margins in the coffee products (though of course rent, energy etc needs to be considered). They also get plenty of income from branded products sold in supermarkets and elsewhere. As you say, they won't have an issue.

 

[Kite159]

Costa will be fine, it's the independent coffee shops which could struggle, especially those which don't have the buying power as the big chains.

 

[Iskra]

Slightly related to the SSP posts, how long do Costa Coffee have until they start to struggle?

I brought one of the Christmas drinks today, the Toblerone Latte and was charged £4.20 for the privilege, next time I'll stick to Greggs.

At these prices, how long until they price themselves out of the market?

You could have just had a simple drink though...

All of those coffee places are going to struggle at those prices I think. Greggs is popular because they don't take the p on their prices and TBH I can't tell the difference between a Greggs or McDonald's coffee and one from an expensive coffee shop.

Greggs is popular for many reasons, but it's a different sort of customer that it attracts. When did you last sit in a Greggs, and honestly how was the experience (draughty, cramped?)? When was the last time a Greggs staff member genuinely engaged with you on a human level, rather than just giving you your order and saying thanks, bye? Greggs and McDonalds coffee is perfectly fine, but the perceived value is in the experience provided at the more expensive coffee shop, plus the extras like Wifi, power-sockets, toilets, drinking out of a proper cup, having the barista know your order before you approach the bar and being part of an imagined community if you're a regular.

However, I agree there still is some risk to the business model as the wealthy pensioners of today demise and incomes are squeezed, but it is still seen as an affordable treat to many and footfall and sales are still very healthy.

The thing is that just as you can get good beer for under two quid in a supermarket yet much more expensive in a pub, the coffee chains also provide a nice place to sit. They are overpriced for takeaway but that isn't all of their business. They also have to cover the costs from just a drink for most people, in McD's most people eat too.

Personally, these days I find the quality of beer is often better from the bottle at the supermarket and it is half the price.

Coffee is no different to other markets - at times like this it’s the middle ground that gets squeezed, as people watching the pennies trade down to McDonalds, Greggs and the like.

I'm not sure your typical Costa or Starbucks customer would trade down to Greggs or Maccies, they'd be more likely not to bother, have a coffee at home, downsize or simplify their order, cut out buying any add-on's like food or reduce the number of visits per week.

This:

They’ll be fine. They’ll have a couple of years with results below expectations, but their business model (mostly franchises) will be solid. Although why anyone prefers Costa to the competition is beyond me.

Costa is of course owned by Coca-Cola and has around 3500 stores across 30 countries. They will get plenty of revenue in from franchise agreements and there are pretty big margins in the coffee products (though of course rent, energy etc needs to be considered). They also get plenty of income from branded products sold in supermarkets and elsewhere. As you say, they won't have an issue.

- - -

When I paid £3.20 for a medium black americano the other week in Costa, Inverness, I was shocked. If it had been some fancy drink, that would have been understandable but it's not as if it was all that worth it! I do like the coffee in Greggs, there is better out there but for the price it's absolutely fine.

The amount of people that go to places like Costa though, they're clearly not going to go out of business any time soon! Coffee #1 is similar here, very busy all the time. I personally don't rate them whatsoever, every coffee I have had from there has not been worth the money.

I wouldn't say I've traded down on my coffee, but I did drastically cut down on my takeaway coffee many moons ago. Too many inferior coffees when out and about made that decision easy, less diverting via Costa (for example) on the way back from an early morning shift given I can make a superior product myself with instant coffee (that's how much I rate the average coffee shop coffee these days!) and I drink up the savings.

What hit me harder though was increasing my buying of Aldi's coffee jars. I once bought, as a distress purchase, a jar of Just Essentials (Smart Price's new name in Asda) jar of coffee some weeks back, it was desperate and I vowed that I would rather go without than drink that nonsense again!

Which really is a sad sign of the times, so many people buying the cheapy-cheap brand stuff. I observed someone trying to buy 4 packets of 40 Just Essentials teabags today, with a limit of 3 per customer. Having to buy such low-quality stuff must be difficult to do, some epic trade-down going on there!

The Costa at Inverness Station is a franchise and thus charges more than a regular store, I was also left feeling robbed for the same reason from that very store! Personally, I don't agree with varying prices depending on where the store is, but lots of the big fast food businesses do this, even Spoons is expensive at airports for example.

 

[Techniquest]

I never knew that about the Costa in Inverness, but I will bear it in mind. As Kite says, it's the independant places that will suffer the most.

I am spoilt by so many such places around here, and I have a number of favourite places to call in on when out cycling. Two of which serve Rijo coffee which I do like a lot. For the record, my favourite local stops are Forge Filling Station, Wormbridge; Marden Stores, Marden; Wellington Village Shop, Wellington and last but absolutely not least is Locks Garage, A465 near Tram Inn. The last one does really good coffee for just £1 Yes two of these stops are petrol stations, but they're still much more local businesses than the huge coffee shop chains, so that has to count for something Also, the last one sells Ma Baker flapjacks, absolutely amazing!

Back to the topic though, as none of the above places will go out of business while I'm in Herefordshire at least. Little Chef being mentioned brings back some memories, and my last Little Chef meal was way back in 2012. If I'd known it would be my last one, I'd have enjoyed it much more! Fun Fact, you can go past the site of a former Little Chef at Hope-under-Dinmore, just north of Dinmore Tunnels between Hereford and Leominster. It was next to the petrol station, I think it's now a caravan sales place. It is a shame the company have gone, no question of that.

 

[jon0844]

I fully expect Twitter to become one of the big name tech failures, but not the only one. The tech bubble is starting to burst, and I wouldn't be surprised if there are some big name failures.

It will be interesting to see how things change, because there are lots of changes in general in the tech space.

A lot of people still writing about tech, for example, are finding it hard to make a living - and unless the publisher can do more sponsored content, there just won't be the money to pay people to write.. and lots of people are giving up for other work. There's just no money in it anymore, and companies would prefer to bypass traditional press in favour of paying influencers to only say nice things about their product and/or service.

The way to get products is to buy them, not get review units, and that means you need income - and people don't want to pay for editorial, and advertisers are paying peanuts.

Then you have YouTubers. Some still making a ton of money if they're big enough, but many more finding the income to be dropping massively - and if they're making less money, will they still pay the likes of Adobe for the tools to create and edit the content? There's also the increased competition, given anyone can live stream amateurish content and get a following (albeit not really making any money) so, again, more people are considering giving up and getting a more secure job - whatever that might be.

People also get bored of watching the same type of video over and over, with all that professional high-grade production value stuff not being enough if the subject matter has gone stale.

For TV, you have multiple broadcasters launching streaming services and all wanting between £70-200 a year. That's not sustainable either. People are tightening their belts, so I doubt there's any room for so many platforms - some of which have very little content that makes it worthwhile subscribing.

Some cloud storage companies are reducing the free allowances or increasing the cost of storage, and maybe some people will just ditch it in favour of going back to using external hard drives and the like (people should in fact do both, but that's not for this thread).

I am sure I could go on for ages if I stopped to think of other examples, of which there are no doubt many.

As for Wimpy, my 'local' one (the one I grew up with) is still there and still run by the same family. I guess they got a good deal and never wanted to change, and the food is great. I guess when they retire and if the children or grandchildren don't want to be involved, it will probably close and become something else.

 

[BJames]

They’ll be fine. They’ll have a couple of years with results below expectations, but their business model (mostly franchises) will be solid. Although why anyone prefers Costa to the competition is beyond me.

Agreed. I am much more of a Caffe Nero person... my order is cheaper there and I prefer their offering on all fronts. Quite like 200 degrees in the Midlands.

 

[TT-ONR-NRN]

Some of you are really quite stingy. £3.XX for a coffee from a mainstream chain is standard price these days. I wouldn't trust a one pound coffee to taste very nice at all.

 

[Russel]

You could have just had a simple drink though...



Greggs is popular for many reasons, but it's a different sort of customer that it attracts. When did you last sit in a Greggs, and honestly how was the experience (draughty, cramped?)? When was the last time a Greggs staff member genuinely engaged with you on a human level, rather than just giving you your order and saying thanks, bye? Greggs and McDonalds coffee is perfectly fine, but the perceived value is in the experience provided at the more expensive coffee shop, plus the extras like Wifi, power-sockets, toilets, drinking out of a proper cup, having the barista know your order before you approach the bar and being part of an imagined community if you're a regular.

I sit in my local Greggs quite a lot, in the morning, a bacon roll and decent latte for £2.50 can't be beaten. It's never felt cramped or draughty and has WiFi and power-sockets. I'd rather the staff member concentrate on getting my order right than engaging in small talk, the amount of times Costa have got my order wrong far outnumbers Greggs.

 

[trebor79]

You could have just had a simple drink though...



Greggs is popular for many reasons, but it's a different sort of customer that it attracts. When did you last sit in a Greggs, and honestly how was the experience (draughty, cramped?)? When was the last time a Greggs staff member genuinely engaged with you on a human level, rather than just giving you your order and saying thanks, bye?

Never. Same as Starbucks, Costa etc. As for knowing my order and all that, never. I don't go in these places often enough.
If a thing I find the staff in coffee shops to be sullen and bored, hardly surprising. Whereas in Greggs they tendmto at least say hello.
When did I last sit in a Greggs? Friday morning. It was absolutely fine to scoff a bacon roll and a cup of tea.
I don't need or want WiFi or power sockets in any of these places, I'm not in there long enough

Some of you are really quite stingy. £3.XX for a coffee from a mainstream chain is standard price these days. I wouldn't trust a one pound coffee to taste very nice at all.

Genuinely, I can't tell the difference between a £3 and £1 coffee. In fact as a general rule more.expensive means bitter and less drinkable.in my experience.

 

[Bletchleyite]

Some of you are really quite stingy. £3.XX for a coffee from a mainstream chain is standard price these days. I wouldn't trust a one pound coffee to taste very nice at all.

Maccys coffee is excellent. They use quality bean to cup machines, fresh milk and are obsessive about cleaning them.

 

[TT-ONR-NRN]

Maccys coffee is excellent. They use quality bean to cup machines, fresh milk and are obsessive about cleaning them.

I've never had it because I'm not a major coffee drinker, but my dad often uses McDonald's or Tim Hortons - apparently it's revolting but a cheap and easy way of keeping awake. Nothing wrong with a cheap but iffy coffee if you're drinking it for the caffeine, but some of you are critiquing the quality and at the same time not wanting to pay for it

Another company I expect to disappear soon is next. I don't see anyone ever use it.

 

[GusB]

I never knew that about the Costa in Inverness, but I will bear it in mind. As Kite says, it's the independant places that will suffer the most.

There are two more Costa outlets within 5 minutes walk of the Station in Inverness - one in the Eastgate Centre and the other is just a couple of doors up from M&S. I've been in the latter a few times, although I'm not sure how the prices compare with the others.

I often wonder if the rise of the (coffee) machines in convenience stores is actually harming actual Costa Coffee shops. They seem to be everywhere now.

 

[Techniquest]

To the young man who doesn't trust £1 coffee, the place I like that does such a thing does good coffee for that price. I didn't trust it before I went there many moons ago, but it's awesome. Nowhere else I know does such good coffee for that price, or at the least isn't a company known for selling cheap burgers, with outlets that exhume the stench of such food far beyond acceptable limits.

Yes I am still complaining about the stench of McDonalds somewhere a little way north of Telford Central! The McDonalds that put me off ever going in one again!

 

[Darandio]

Maccys coffee is excellent. They use quality bean to cup machines, fresh milk and are obsessive about cleaning them.

Agreed although I had a really poor Latte on Saturday morning. Won't put me off though, it's a one in a hundred thing. Talk of it being cheap or revolting just smacks of snobbery.

I'd also recommend Cooplands for a coffee when anyone is 'oop North', I find a very decent coffee outlet.

 

[Techniquest]

There are two more Costa outlets within 5 minutes walk of the Station in Inverness - one in the Eastgate Centre and the other is just a couple of doors up from M&S. I've been in the latter a few times, although I'm not sure how the prices compare with the others.

I often wonder if the rise of the (coffee) machines in convenience stores is actually harming actual Costa Coffee shops. They seem to be everywhere now.

I only had a few minutes before the 158 I wanted to catch was leaving, otherwise I'd have gone elsewhere!

 

[Russel]

I wouldn't trust a one pound coffee to taste very nice at all.

Maybe try one before judging.

 

[TT-ONR-NRN]

Agreed although I had a really poor Latte on Saturday morning. Won't put me off though, it's a one in a hundred thing. Talk of it being cheap or revolting just smacks of snobbery.

As someone who regularly goes clubbing in cargos from Primark, I do not agree that disliking cheap coffee makes me a snob. You're not obligated to respect my personal tastes if you don't want to though.

 

[BJames]

I've never had it because I'm not a major coffee drinker, but my dad often uses McDonald's or Tim Hortons - apparently it's revolting but a cheap and easy way of keeping awake. Nothing wrong with a cheap but iffy coffee if you're drinking it for the caffeine, but some of you are critiquing the quality and at the same time not wanting to pay for it

Another company I expect to disappear soon is next. I don't see anyone ever use it.

I know what you mean, but I just looked it up and apparently next is the largest clothing retailer by sales in the UK.
I get a lot of my stuff from there, and it is often quite quiet (although some of the central London branches are often busier). I think they do quite well online.

 

[TT-ONR-NRN]

I know what you mean, but I just looked it up and apparently next is the largest clothing retailer by sales in the UK.
I get a lot of my stuff from there, and it is often quite quiet (although some of the central London branches are often busier). I think they do quite well online.

Interesting. I was dragged into Queen St. next the other day (and spent half an hour bored to death in the women's scarves section ), and it was rather dead. It often looks dead when I walk past it daily too. I quite expected it to go a similar way to Debenhams or Topshop at some point. (I wouldn't mind; it's a torturous shop)

 

[cactustwirly]

Maccys coffee is excellent. They use quality bean to cup machines, fresh milk and are obsessive about cleaning them.

It's very average, they use very poor beans which affects the taste.
A proper manual Expresso machine beats a bean to cup hands down.

I'd rather spend £4 in a Indy place with really flavoursome coffee than have the brown dishwater from maccies for £1

 

[Steddenm]

Here in Ireland most stores (Supervalu, Dunnes, Spar, Centra, CircleK etc) have a bean-to-cup coffee machine and to be fair it's decent coffee, and not overly expensive (usually about €2.60).

Costa Coffee over here aren't part of the Coca Cola ownership, they're all franchises and trade as Costa Coffee Ireland Ltd - as do the ones in NI. You can't use the Coffee Club card.

 

[johntea]

I wonder how well 'Leon' are doing, their branch at Leeds Station always seems to be completely empty

I tried it once and wasn't too impressed, it was quite expensive and didn't fill me up at all

 

[trebor79]

I wonder how well 'Leon' are doing, their branch at Leeds Station always seems to be completely empty

I tried it once and wasn't too impressed, it was quite expensive and didn't fill me up at all

I think they get bought out by someone bigger during the pandemic, after hitting financial difficulties.
I quote like them. Not the usual greasy rubbish you get at travel hubs, and they have some interesting things on the menu. They are no more expensive than the other offerings at such places, but is a better quality of product IMO.

 

[LowLevel]

Some of you are really quite stingy. £3.XX for a coffee from a mainstream chain is standard price these days. I wouldn't trust a one pound coffee to taste very nice at all.

Nah. 3 quid plus is utter nonsense. I'm quite happy chucking money at enjoyable consumables but £3.35 for a poorly made barista coffee that doesn't even have any milk (black coffee is the only way) in it is rubbish.

If it's nice it's less objectionable but more often than not they burn it to death.

 

[Busaholic]

Another company I expect to disappear soon is next. I don't see anyone ever use it.

You could be a seer, or you might have got it entirely wrong. Next has just bought Made.com out of administration, full price sales are up year on year and shop, as opposed to online, sales are bouncing back too. In an act of supreme irony their chairman Lord Woolfson, an arch Brexiteer,, is now arguing that immigration rules need to be eased to enable Next to recruit more workers for their warehouses! Someone has pointed out that if they paid the same wages as their competitors they'd be able to recruit and retain more staff in the first place.

 

[ChrisC]

Costa will be fine, it's the independent coffee shops which could struggle, especially those which don't have the buying power as the big chains.

I’m trying to support local independent coffee shops whenever possible. Whenever I visit a town and want a coffee I will walk past Costa, Starbucks, Cafe Nero etc to try to find an independent coffee shop. Last week I was in Chesterfield and I found around the corner from Costa, and literally just behind Cafe Nero I found a lovely independent shop. Great coffee with really friendly service and it only cost me £2. I can’t comment upon McDonalds as I don’t think that I have been in one for at least 20 years!

 

[krus_aragon]

Coffee is no different to other markets - at times like this it’s the middle ground that gets squeezed

That sounds like an interesting way of making coffee...

 

[GusB]

I am by no means a coffee snob, but on the one occasion that I had a McCafe, it was fairly acceptable. Back in the dark days of the 1990s I worked in McDonalds for a time and they honestly weren't too bad back then. There was none of your freshly-ground bean nonsense in those days, but it was a decent cup of filter coffee nonetheless.

A decent cuppa doesn't have to cost the earth, and there's a fairly big profit margin when making one; those who dismiss a 99p coffee have no right to criticise unless they're willing to actually try it.

 

[DelayRepay]

I know what you mean, but I just looked it up and apparently next is the largest clothing retailer by sales in the UK.
I get a lot of my stuff from there, and it is often quite quiet (although some of the central London branches are often busier). I think they do quite well online.

It's similar here - we have two Next clothes stores and two Next Home stores in our town and none of them ever seem busy with shoppers, although they do seem to have a constant stream of people returning things they've bought online!

Next's home shopping operation is massive though - it existed long before most homes had the internet in the form of the Next Directory catalogue. I once visited their distribution centre in the Dearne Valley. This is about 20 years ago and even then they were packaging up lots of items for home delivery. I have a feeling they also provided outsourced distribution and call centre facilities to other companies, not sure if they still do.

I also remember the days when there would be people camped out overnight outside their stores, waiting for the Boxing Day sale to start. I don't think that happens so much now.

Where they seem to have done well is maintaining their 'middle ground' market. Not cheap tat like Primark, but not too expensive either. Most of the other players in that market are long gone.

I can't see Next going anywhere to be honest, but I wouldn't be surprised if they rationalise their store estate, like a lot of other companies have done.

== Doublepost prevention - post automatically merged: 21 Nov 2022 ==

I am by no means a coffee snob, but on the one occasion that I had a McCafe, it was fairly acceptable. Back in the dark days of the 1990s I worked in McDonalds for a time and they honestly weren't too bad back then. There was none of your freshly-ground bean nonsense in those days, but it was a decent cup of filter coffee nonetheless.

A decent cuppa doesn't have to cost the earth, and there's a fairly big profit margin when making one; those who dismiss a 99p coffee have no right to criticise unless they're willing to actually try it.

Same here - happy with a McDonalds coffee. Especially at motorway service stations where they don't seem to add an excessive mark up, unlike the Costas and Starbucks. Greggs seem to be trying to move into this market too.

The difference - I'd go to Starbucks or Costa to meet someone and sit and have a chat over coffee and lunch or a cake. Whereas McDonalds tends to be for 'fuel' on the way somewhere else, rather than to sit down and chat to a friend.

I can't see Costa going anywhere, despite the cost of living crisis the ones near me seem as busy as they ever have been.