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.
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If I’d been doing the survey I would have had a question in there about provision and maintenance of toilet facilities.
I would also have been trying to frame a question about litter – which I regard as negative advertising, and indicative of too small a contribution to local councils’ street cleaning. We don’t have a McDonalds here but we somehow do still have McDonalds litter; lots of it. And Costa litter, ditto.
Personally I have less of a downer on Starbucks because (presumably) their nearest outlet is too far away for even the most ardent litter droppers.
This may appear to be a rant which is out of place on an economics blog, but it is symptomatic of the prevalent philosophy of privatised profit and socialised costs.
My advice – avoid the chains and adopt a local independent. I’m fortunate to have some excellent ones in my area – friendlier, warmer ambiance, much better quality coffee and vfm.
John D says:
January 22 2018 at 5:33 pm
“My advice — avoid the chains and adopt a local independent. I’m fortunate to have some excellent ones in my area — friendlier, warmer ambiance, much better quality coffee and vfm.”
I agree, but I think we have to accept (albeit begrudgingly) that these big chains have done a great deal to increase the availability of drinkable coffee.
It’s not long since the only place you could get decent coffee was an Italian restaurant.
Those bloody awful filter machines with boiling plates under the jug haven’t quite disappeared yet, but they are fewer than they were.
“a perception that Starbucks does not pay its fair share of tax”
Were these people also asked what “(Starbucks’) fair share of tax” was?
Do perceptions work like that?
If so, how?
And why do they remain perceptions in that case?
Jonathan Sanders says:
January 22 2018 at 7:04 pm
“Were these people also asked what “(Starbucks’) fair share of tax” was?”
Probably not, (almost certainly not, and who would know?) but following on from my earlier remarks I would suggest that a fair share would be enough to ensure that the empty discarded cups weren’t lying about in the streets of towns and cities and in the verges of country roads and the plastic detritus wasn’t killing marine life.
I wonder how much that is?
That was tedious Jonathan,
Paying your fair is generally recognised as: paying your normal percentage rate without dodging most of it. Doing so is considered to be fair in the sense that most people have to that and so should the tax dodgers (consistency as opposed to privilege or special treatment. ).
Correction: paying your fair share is normally recognised as….
I was in that survey: I said ‘No, Starbucks doesn’t pay its fair share’.
There wasn’t an option for paying more than what was fair, and they’ve included my answer under less.
Respectfully, I don’t believe you