What’s the cost of Costa?

Costa Coffee has lodged a planning application to open a new coffee shop on Westow Street. We’ve objected, and wanted to spell out our reasons.

Some people have suggested it’s just the free market – people can vote with their wallet, and if local people want to buy coffee from Costa then it should open a café here.

But life is a bit more complicated than that.

Crystal Palace enjoys wonderfully vibrant mix of independent businesses, and Costa’s arrival coincides with reports of rising rents, driven up in part by interest from chain stores that are able to price out and squash the competition to corner the market. We don’t have a completely free market in which everyone wields equal power. There are only so many units in the Triangle, and multinational business chains are far richer and more powerful than independent businesses, which is why they tend to win in the end unless the local authority takes steps to protect independent business.

So why should they block Costa?

Independent businesses are better for local prosperity. A pound spent in a local café may go on to be spent in the Transition Town’s Food Market on a stall started up by a new local trader, who will in turn spend it in the Bookseller Crow, and so on. This “multiplier effect” means that local businesses create more prosperity and spread it around more.

This isn’t true of multinational chains. Costa may have been founded by local lads in Lambeth, but today the profits leak out of our high streets into the pockets of shareholders all across the world. A pound spent in Costa may roll down the hill into the pockets of a shareholder in Dulwich, Bromley or Coulsdon.

Crystal Palace is a relatively deprived area, so it’s much better if we can develop a local economy which keeps money circulating in the area. Analysis by organisations like the New Economics Foundation and Civic Economics in the States have found that locally owned businesses can create more than three times the economic activity of competing chain stores on an equivalent revenue.

Though we shouldn’t hold it against Costa, this application should also be seen in light of wider changes in the area. Wetherspoons have bought the freehold of the Grape & Grain for a huge sum over the asking price, and if ZhongRong Group are allowed to build a hotel and conference centre on the park that could transform the local economy, driving land values, rents and rates up further. We need our councils to be mindful of the value of our current town centre.

Our planning application response

Unfortunately, the UK’s planning system ignores all of this evidence in favour of independent businesses. When it comes to lodging our objection or support for a planning application, residents will only have an impact when we relate our comments to planning policy. So our response gave two grounds for objection:

1. The plan to place seating on the pavement would create an obstruction on a relatively narrow section of pavement.

2. The change of use from A1 retail to mixed A1 with A3 (restaurants and cafes). There are already ten cafes on ‘The Triangle’, with more nearby including at the train stations, in addition to at least 24 restaurants and further pubs and takeaways. Allowing this change of use would be detrimental to the diverse retail offer in the area.

You can lodge you response, to support or object to it, here.

What the council could still do

People often get frustrated when councils sit and watch chains open up shop at the expense of local independent traders. Often they have no power to intervene.

But there are things that the five local boroughs could do to support small independent businesses in Crystal Palace, such as:

  • Bring in planning policies to promote diversity in the retail offer, and to identify key local services that all people should be within 400m walk of, helping them to reject planning applications that would damage the local area, and encourage a better retail offer
  • Promote schemes like Shop Local Day and the Wedge Card
  • Talk to Crystal Palace Transition Town and the Brixton Pound about setting up a local currency for the area, which keeps money circulating in the local economy
  • Change their procurement policies so they take account of the multiplier effect benefits of buying from local firms in deprived areas
  • Put more money into small grants programmes like the Anerley Regeneration Project, helping independent traders to, for example, keep their shop frontages smart and attractive
  • Set-up or partner with a business lending scheme, possible along a peer-to-peer model like Funding Circle.

These are just a handful of ideas. Whether or not the Costa opens, there is much more our councils could do to value and support local independent businesses in Crystal Palace.

Photo of coffee courtesy of Rahim Packir Saibo on Flickr.