Coffee shops are still tainted by tax

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Populus has published a report on public perceptions of UK fast food outlets from McDonalds, to Greggs to Starbucks via Costa and Pret a Manger. It makes for fascinating reading.

What they argue is that:

how consumers feel about high-street fast food names plays an integral part of whether they sink, or swim, in an ever competitive space. Our research shows that while some reputations are helping, others are not.

And, as they argue, tax plays a part in determining how people feel about a company. As they say:

[Five years after it hit headlines] the perception that Starbucks does not pay its fair share of tax lingers on, regardless of the facts. For all the plush velvet cushions and personalised coffee cups, it’s a perception that just won’t budge. In fact, the evidence suggests that the issue now casts a shadow over the entire category. Not only is Starbucks still tainted by the 2012 allegations, but Costa Coffee and Pret A Manger are also seeing their reputations damaged by tax, despite protestations they pay their fair share.

This is the key chart of their findings:

Figure 1

Starbucks seems to be struggling with a fairly poor reputation.They tested why and found:

Starbucks is being damaged by tax. Only ten per cent of UK adults agree it ‘pays its fair share of taxes’. Interestingly, Starbucks is also rarely viewed as contributing to local communities (18 per cent agree) or as contributing to the UK economy (21 per cent agree), which suggests the tax issue has impacted on views of Starbucks’ wider economic contribution. Of course, Starbucks should also be concerned by its low scores for value for money (22 per cent agree) and helping people live more healthily (13 per cent agree).

A comparison table looks like this:

Figure 2

And note that it's not just Starbucks. As they note:

 Costa Coffee and, to an extent, Pret A Manger (though fewer people feel strongly about Pret) are also weighed down by tax. Just 17 per cent agree Costa ‘pays its fair share of taxes’ and 12 per cent say the same of Pret (and well below McDonald’s).

The point is significant: paying tax matters.

And the public rightly remembers those who don't.

Just as they do remember those who have done well on this issue, such as Gregg's.

I could, of course, mention  the Fair Tax Mark at this juncture. I happen to think it important. The evidence suggests that the public may be more aware of these issues than many in business think.