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Murchie's on the block · 9.11.07 by colin newell

Stodgy Murchie's on chopping blockIn 1975 I got one of my first introductions to specialty coffee via Murchie’s of Victoria. My Brother-in-law bought me a bag of Dark French coffee. At 15 years of age, I was in for a bit of a shock. This was not what I was accustomed to… but it would set the wheels in motion for what would be a future endeavor for me.

Coffee. Coffee, coffee, coffee.

Here in the 21st Century, the old Murchie’s firm is now on the block… for sale… to the highest bidder I guess.

But why?

The Receiver-manager of Murchie’s Canada blames the firm’s demise on increasing material and labor costs.

Right. In a red-hot economy where everyone is doing terrific thank-you very much, we can blame labor and material costs.

Let me see. The raw materials, Tea and Coffee can still be purchased for cheap (if you bypass the Fair Trade options — much as Murchie’s has me-thinks) and then you mark them up 200 to 400%. The result: Profit.

Labor costs are at something of a historic low in B.C. – the minimum wage being something under 9$/hour.

So. What is the real deal here?

I think Murchie’s have been sitting on their hands for so long and have entirely lost touch where specialty coffee has gone in the last decade. Visiting a Murchie’s today is like jumping onto an episode of the Time Tunnel. For you Gen-Xer’s, it means that Murchie’s lives within a temporal time bubble – somewhere in the late 1800’s. They are out of touch with modern coffee commerce and the new reality of better coffee served by people who know coffee.

Murchie’s: I wish you luck!

  1. Well, that’s true. Murchies has been a time warp for about 20 yrs..
    I can’t remember the last time I bought coffee there.
    Every time I walk by I wonder who actually bothers to go in, besides tourists.

    Bill


    The Big Guy    Nov 13, 07:26 pm    #
  2. The old lady milked it!
    She had zero passion for coffee so adios to an institution.

    geir


    geir oglend    Nov 14, 05:02 pm    #
  3. Bill – you are being generous. When I first shopped there in 1975, they seemed so yesterday… totally catering to little old british tea drinking ladies from another era – well, those little old ladies died and were not replaced.

    Geir – you are spot on. You can only milk the old girl for so long without feeding her some love and oats.

    The hope for Murchies is that they have goodwill, good intentions and some pretty solid branding – even if they are 50 years past their best before date. A good infusion of modern thinking and re-focusing may get them back on track…

    Then again, Starbucks might buy the locations and shut the whole stale operation down.

    The reality is: There are several local parties interested… and none of them are from the corporates…


    Colin    Nov 15, 11:26 am    #
  4. Interesting blog. I agree in general except with the reference to labour costs.

    Minimum wage plays very little role in the cost of labour at this time. Lack of a labour force does.

    Many establishments have been paying $9 and up while the minimum wage is set at $8.

    The low numbers of job applicants means that we must compete in this business (bakeries, cafes) with restaurants whose staff receive 10-15% in tips , and the construction industry.

    We start our employees at $9, dishwasher (under 16) at $8.75. Many get $10, some $11 and bakers earn $12 and up. Our payroll should be around 30-35% and it runs over 40%.

    Not to whine – this is a fairly common scenario for anyone crazy enough to marry these two businesses together. On the other hand, Murchies has grown staid, competing with more sophisticated establishments. Many of those may not have the same quality of SOME products (coffee not included), but is is simply too old-fashioned.


    Mark Engels    Nov 26, 09:28 am    #
  5. I’d have to say that portions of the demise lay directly at the top of the company. In an email discussion some years back it was clear that Gwen had lost touch with a very key factor , customer service and loyalty. The quality of the product was adequate though not spectacular. Regardless, in dealing with a somewhat loyal customer (me) I was given the brush off and that ended all commerce from my wallet. I do not think I was alone…sad really for the employees …Somehow I have resisted sending a last reply to Gwen on her last words of arrogance ..


    Guy    Dec 30, 08:24 am    #
  6. Guy! Long time no hear. Yea. Murchie’s has a place in all of our memories. Ironically, it was Peets and Murchies that inspired the original boys that started the Green Machine, Starbucks…


    Colin    Dec 31, 01:36 pm    #

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