Wednesday 20 April 2016 5:29 am

Trouble percolates for Caffe Nero over living wage after coffee chain bans free lunches for staff

What is city talk? Info Info. Latest

In recent weeks, several businesses have announced they will fund the living wage by cutting back perks for staff – something which is causing the public to turn against the brands in question.

One of the best examples where this has happened is Caffe Nero.

The high street coffee chain reacted to the introduction of the living wage by telling staff that wage increases will come at the cost of the free lunches they were given previously.

Caffe Nero defended its decision by stating that it is paying all staff the living wage, not just the stipulated over-25s, and that these changes to pay would have a “significant financial impact on the business”.

The company has also been accused of failing to pay its “fair share” of corporation tax. It has not paid any of the duty since 2007 despite profits of £23.6m in the 2014-15 tax year.

Caffe Nero is by no means the only company to change their policies in the wake of the wage hike. Fellow high street food chain EAT will no longer pay staff for 30-minute breaks, and Wait­rose has stopped paying Sunday and overtime rates for new shop workers.

YouGov BrandIndex shows the public has reacted negatively to Caffe Nero’s decision.

Among those who are aware of the brand, there has been a considerable dip in Caffe Nero’s overall Impression score, with it falling from 14 to seven since the story broke. But it has not just suffered a perception blip; the story has also affected whether people say they buy coffee there.

In the past two weeks, Caffe Nero’s Purchase Consideration Score (whether a respondent would consider buying from a brand) has dropped by four points.

Yet people saying they won’t buy their favourite coffee doesn’t mean they will stick to that intention – Starbucks’ score dipped by four points when it was in the news for its tax affairs but recovered that number within five months.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.