I’m a big fan of Waterstones. It’s a good bookshop. It’s not Amazon; it even pays UK taxes. I like the atmosphere of bookshops and would be sad if they disappear from the High Street to be replaced by drones delivering books from anonymous warehouses somewhere off the M4. Even though Amazon is often cheaper, I do like to buy books from a proper bookshop like Waterstones because I enjoy browsing, and don’t like being a complete free-rider (enjoying the atmosphere of a bookshop to then go and save a couple of pounds ordering online)
I also used to spend a lot of time in the Costa coffee shops in Waterstones. It’s a good place to work and write some economics.
A while back, I noticed Waterstones were replacing Costa Coffee shops with their own brand of coffee shops. It makes sense to try it as a business idea. Selling coffee is, at least, one area free from the internet.
I don’t consider myself a coffee connoisseur like some of my Italian friends. But, I know what I like and I can tell the difference between good and bad coffee. I was interested to see how they would do because Costa Coffee have really got it down to a fine art. I though it would be really hard to improve on the coffee shop experience of Costa Coffee.
How did Waterstones get on as a coffee shop?
The first thing is that the Waterstones staff are unfailing friendly. You can tell they mean well and are trying hard. But, they don’t seem to have been on a barista course. When I ask for a ‘dry’ cappuccino they all look flummoxed. I try to explain it is a cappuccino with froth instead of milk. (It makes it more like a macchiato). Maybe I’m not very good at explaining, but they always end up making it like a traditional cappuccino. I’ve been in two Waterstone cafes in Oxford and Bradford. It’s interesting you get the same experience in both places. Also the coffee (especially first thing in morning, isn’t as hot as I would like.) At a Costa coffee I once noticed a file with a menu for all possible drinks – Costa Barista’s have to learn these menus. I’m pretty sure Waterstones staff don’t have this.
Often you get the sense that they are really trained booksellers who have been asked to make coffee on the side. Some are very frank and say “Sorry, I don’t know how to make coffee properly”.
Sincerity and honesty are very good. But, when you go to a cafe, you would prefer to be met with a confident barista who takes pride in the job.
Interestingly the former Costa manager was offered the job at Waterstones, but she turned it down because she wanted to specialise only in coffee and not also be responsible for selling books.
I’m very English and won’t complain when my dry cappuccino is not quite right. Part of me feels guilty for being fussy – what’s wrong with a traditional cappuccino anyway? But, I don’t want to make a fuss about it. My consumer behaviour is just to avoid situation and I end up going to Blackwells instead, where Cafe Nero always gives super excellent reliable coffee and I don’t need to explain what a dry cappuccino is.
The sad thing for Waterstones is that when Costa Coffee was in Waterstones, I was buying more books from Waterstones. Now, I buy those occasional purchases from Blackwells instead. I buy books / maps / cars e.t.c simply because I’m enticed into the bookshop by the coffee shop.
I sometimes go to the Costa at Leeds Waterstones and recently I asked the manager if Waterstones are likely to take over the cafe. He said he heard that Waterstones hadn’t made as much money as they hoped from cafes and were probably going to leave it as a Costa. I’m happy to hear.
- Going back to Waterstones, the decor is OK. They made it more open than Costa. More light is good, but the chairs aren’t quite as comfy. It feels more like an open plan service station cafe. Costa had slightly better seating.
- The big advantage of Waterstones is that they don’t play loud irritating music, like most other coffee shops do. This is why I was hoping they would do well.
- The price is higher than any other coffee shop. £2.60 for a large cappuccino. I don’t mind paying a higher price, if the quality is there. My demand is highly price inelastic for the best coffee shop.
- I often get charged a different price for same drink. It varies from £2.30 to £2.90. I ask for a large cappucino, in a smaller cup. What they do is charge me a small + extra 60p for extra shot. This is more expensive than a large (2 shot cappuccino). I explain that why should I pay more for the same drink but in a smaller cup with less milk? Regular staff get to know, but there’s always someone different making coffee. (To be fair to Waterstones, they have recently dropped the extra 60p for an extra shot.)
Business lessons for Waterstones
If you’re going to do something, you have to do it really well. If you are going to have a coffee shop, you have to aim for excellence and comprehensive training of staff, otherwise it will not help the business and brand like you hoped.
Specialisation is good. I liked the attitude of the Costa manager who wanted to stay with a coffee specialist company.
Coffee shops are a crucial avenue for encouraging greater footfall into the shop and gaining spin off sales of books. It’s not just about maximising profit in the coffee shop.
Fortunately, not everyone is as fussy as me. But, the cafe does seem quieter than when Costa were running it.