Nestle confirms move to “ideal location” (ie. not Croydon)

They were only in Croydon since 1965: Nestle were today decried as

The signs at East Croydon Station that declared it to be “the home of Nestle UK” need changing.

Nestle, Croydon’s largest private sector employer, this morning confirmed reports that it is to abandon the borough, moving its UK HQ offices and nearly 1,000 staff out of London to a building in Crawley.

Whether the spiky farewell remarks of Croydon’s council leader, who described the multi-national company as “footloose”, will impress any other Blue Chip firms who just might consider locating their businesses in the borough remains to be seen.

“This move represents an exciting new chapter for Nestlé in the UK,” Paul Grimwood, the company chairman and CEO, said in irritating corporate speak.

And in what can only be seen as a ringing condemnation of Croydon and the local council’s failure to deliver Nestle with adequate new offices, Grimwood said: “Our new head office will provide a modern, efficient and attractive workplace for our people, in an ideal location.”

 

Nestle’s move is likely to have a devastating effect on local businesses which service the Nestle Tower and its staff. Croydon’s voluntary groups, sports clubs and charities will also be hit, as the company was often a generous contributor to their funds.

Mike Fisher, Croydon’s Brave Leader, sounded a somewhat petulant note, accusing Nestle, which has been based in Croydon since 1965, of being “footloose”.

“We have done everything we possibly could to avoid this outcome,” Fisher claimed, “but ultimately we have to respect the fact that Nestle are a footloose global company and can choose where they locate their business.

“We must now re-double our efforts to accelerate the regeneration of the town centre to ensure it is an increasingly attractive location for potential inward investors.” Yes, Mike, all those “footloose” ones.

“We already have great transport links. Now we must focus on improvements to the public realm and enabling high quality residential and commercial developments to come forward at pace.” Like they have failed to do for the past five or six years…

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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12 Responses to Nestle confirms move to “ideal location” (ie. not Croydon)

  1. Pingback: Extra, Extra | Londonist

  2. They’re moving to an industrial estate on the outskirts of Crawley. Their new HQ will be sandwiched between a truly new town with an objectively worse shopping and entertainment offering than ours and an airport runway: All for a decrease in airport journey times of what, 10 minutes? (bearing in mind the 15 minute fast trains to Gatwick airport itself from EC).

    Say whatever else you like about the council. It sounds like you’re spinning a Nestle cost-cutting exercise into a serious comment on the area. I’m sure they’re management and publicity people are loving your take on it. Do you really want to be doing the work of multinationals with poor records on the environment and health? Just for an anti-tory cheap shot?

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    • It is far from a cheap shot. As we reported on Wednesday, the building owners in Crawley made Nestle an offer they could not refuse – after patiently waiting for the lot at the Town Hall to deliver something useful for FIVE years.

      How long does it take?

      The August riots ought to have been some form if catalyst for action. It was not.

      Another commenter on this site has today said: “The Local Authority appears to prefer speculative developments such as the Menta Tower rather than the guaranteed income generation of a Major Global Business brand.

      “The political representatives have to justify their regeneration strategy which to date has not changed the perception of major decline in the central business district.”

      That’s not a “cheap political shot”, but a reasoned assessment of a situation that has been allowed to develop (for want of a better word) for years.

      We recommend you take a look at a blog posted by (Labour) Councillor Timothy Godfrey yesterday, which offers analysis of how Croydon got to this point with Nestle.

      It was this current council which cancelled development plans for the St George’s site in 2006, no one else.

      It was this current council’s preferred scheme for that site – aimed at bringing in John Lewis, at the potential expense of long-established Allder’s up the road – which collapsed. So would that be a “sheap political shot” to highlight that, too?

      It was this council’s decision in 2006 to cancel plans to re-build around the Fairfield Halls, too.

      As Godfrey writes: “Why is this important? Because Nestle directors would look out of their windows and see a town uncared for and windswept. On their way into the office, they would find the area pretty much uncared for, apart from the bright Trams whizzing through the town. At night, they would leave their offices and witness feral youths roaming the streets who take over the town from 3pm every day. Then on top of that they saw Croydon burn on their TVs.

      “So, if you are a major international company, with visitors from all over the world, why would you want to bring those visitors and your staff into the centre of a Town that the Council seems not to care a jot about?”

      Seems like fair comment to us.

      Call Me Dave is a big one for people taking responsibility for their actions. The current Conservative-run council is responsible for the Nestle shambles.

      Click here to read Timothy Godfrey’s post in full.

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  3. Theoretically, a lot of what you say here makes sense: and the record IS very questionable.

    I would point to schemes like the Gateway as a case in point. But you’ve not addressed my main point, and when you look at the facts its not obvious that anything you’ve pointed to would make a difference.

    Just look at where they’ve decided to go.

    They don’t like showing their Croydon base to international visitors? How is an industrial estate on the edge of Crawley, next to an airport runway supposed to impress them? A place with limited amenities for their staff. Look at a comment a Nestlé employee has made: “It looks like a cost-cutting exercise. Most of the staff would probably rather stay in Croydon.” Of course, because at least there was somewhere to do a bit of shopping, have lunch and go for a walk.

    The building is more modern but that is it. If they were really bothered by what was around them they’d be locating to the new developments at Stratford, to Canary Wharf or possibly the West End; they wouldn’t be going to Crawley.

    A multinational with any PR department worth its salt is never going to say “we’re doing this to cut costs” when they can blame someone else. Things getting better would have likely made no impact at all. This new building looks much smaller, so they may well be making redundancies too. Look at BT (who even disposed of the building Nestle are moving to) They’re cutting down their offices because they are moving to more and more remote working: not even having an office. The whole idea of big offices everywhere is in general decline in the west.

    Yes we are more badly hit, but in any market, the less desirable places will be hit first: central London will always be more resilient because its the most desirable place to have your office. But look to any other part of Britain and their are surplus offices everywhere.

    Not questioning Nestles motives here, bearing in mind the generally left wing tone of this blog, is VERY odd and stinks of opportunism. This does look like you’re trying to turn a global problem into a Croydon problem for political effect. That is a fair criticism.

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    • As we reported before Nestle even confirmed the move: they have been made an offer they cannot refuse.

      The property sites report the rent at Crawley at £20 per sq m – as opposed to the market rate in Croydon of at least £30 for comparable properties.

      So it is all about the bottom line. That should be no surprise.

      Of course many Nestle staff would prefer to stay in Croydon: many of them live here, and, as another poster has pointed out, they now face a daily commute to Gatwick and the associated (rising) transport costs.

      Croydon has long-term, deep-seated problems – involving planning, jobs and development – which have failed to be addressed for decades.

      The current frustration with the present council is its obsession with using millions of pounds of public money – secretly – on a private enterprise scheme while appearing to ignore the real development and social issues that need addressing.

      Shortly after the August riots, Andrew Pelling posted an insightful analysis of Croydon’s development misadventures going back to the 1940s, which you commended at the time. It is a recommended read, and now might be a good time to review it: https://insidecroydon.com/2011/08/11/croydon-was-vulnerable-after-being-short-changed-for-decades/

      Nestle’s departure, everyone agrees, is a massive blow for Croydon. It was entirely predictable. And this has happened on the watch of a Conservative council that has been in charge of the borough since 2006 and sees 1,000 jobs leaving London when there has been a Conservative Mayor at City Hall for nearly four years.

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  4. firegut says:

    Nestle say “Our new head office will provide a modern, efficient and attractive workplace for our people, in an ideal location”.

    Ideal for the CEO maybe (who, as you suggest, does dislike Croydon), but the move isn’t ideal for many of the staff, having to travel to West Sussex and then take a shuttlebus or walk to an industrial estate in the middle of nowhere. Aside from the fact their working day has just been made much longer, they will be taking a massive pay cut, paying to get all the way to Crawley when most of them live in Greater London. Many live in Croydon itself, it’s bad enough for them. From further north into London and it’s even worse.

    Croydon Council should have been able to keep Nestle here. How can we believe they will generate new business when they can’t keep established business?

    But I feel sorry for Nestle employees as well as Croydon itself.

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  5. mraemiller says:

    Barwell seems to put the blame rightly on the “disasterous arrangement that the previous Labour Council entered into with Minerva to redevelop Nestle’s headquarters and the surrounding St George’s Walk”
    that saw all the shops in George’s walk more or less closed including Turtles only for NO redevelopment to take place.
    Although how exactly this is the Labour Party’s fault I’m not sure given the Conservatives have had control since 2006.
    Haven’t seen so much impotent hand wringing since the clouse of the Paynes Poppets factory.
    However, I have a plan … let’s offer Nestle the new Tory Luxury HQ? and keep all the Council people in Taberner House?

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  6. James Naylor says:

    Inside Croydon,

    I would argue that the bottom line for Nestle was all important. As you say; its actually a move that will have other costs for Nestle; it will hurt morale. £20sq ft for a modern building is very cheap indeed and probably not attainable in Croydon; which is, ultimately, still part of the overall London office market. That kind of deal is probably only attainable on an industrial estate in the middle of nowhere. But this means that the Nestle’s move was not predictable based on anything going on in Croydon; even if it was inevitable. Indeed, if things were healthier here (and you’re right, there’s much that can and should be improved) rents would likely be even more expensive; ironically making Nestle less likely to stay, not more.

    As it is free market, the council can’t control rents to keep hold of businesses looking for an impossibly cheap deal. Indeed they probably shouldn’t even if they could.

    The town relying on a few very big businesses is bad news for everyone in the long term, precisely because it leads to crony capitalism: Big businesses that can throw their weight around, and make the democratically elected local authority do what they want. Indeed, the council were presumably already spending council tax on them to get them to stay by appointing consultants for them; in the hopes that they would sign on one of the potential new office developments. This was probably a waste of public money and time, on a wealthy multinational company no less, precisely because Nestle would never have paid the £40+ sq ft they would need to be for these developments to process.

    It’s a far better thing that we have more, smaller and mid size businesses around; that way no one business can hold the council to ransom. So I actually think, provided we can get more, smaller businesses into the town centre, this is better in the long run, and not nearly the disaster that it has been reported as.

    Regarding Bernard Wetherill House; I’m still not sure it’s entirely fair to paint it as such a scandal. It’s my understanding that none of the money comes out of council tax because its paid for entirely by releasing assets: and as it also happens the council are lending John Laing money at a higher rate of interest than they acquired the credit; which will make them a profit. Further, because it’ll have lower running costs, it should save money over the life of the building. I think it will also improve the image of the area. It’s a quality building; and will have a positive visual impact on people looking to move to Croydon for its excellent transport, green spaces and good shopping. This is further enhanced by the fact John Laing will knock Taberner House down (a poor example of 60’s modernism) and replace it with a new residential building.

    Now; there is still an argument here that it shouldn’t be the focus of their activities right now: Perhaps money could have been released from assets for other projects like funds to increase small businesses. Fair enough; I agree that the council need to work on that. And its also fair to say that we all still pay overall in the long term (the council has far fewer assets – there is no such thing as a free lunch) but I just don’t think its reasonable to paint it as anything other than a complex issue with arguments on both sides.

    Andrew’s article is very good because it does paint a very a informative picture of development in Croydon since the second world war, which is something there isn’t nearly enough awareness about. But I’m not sure I agree with all his conclusions from it, or yours. The thing that stood out most of all for me was this idea that the poltical elite have come to look down their noses at Croydon.

    The thing is, I’m not sure this is just about political affiliation. In my experience, your classic inner london liberals and champagne socialists believe the same thing. When I meet people in powerful, wealthy or traditionally more upper-class circles, I am constantly defending Croydon as, in all reality, a great place with an illustrious history. Some people are very open minded, but many among those more socially powerful groups are not.

    If some conservatives are particularly bad on this front, that’s because they tend to be move in even more traditionally upper class circles: (Eton, Oxford and West London or if you’re Nick Clegg, Westminster, Cambridge and erm…West London again!). But it’s difficult to see how this social divide in Britain is really the local council’s fault. If anything its surely because they come from more ‘down-to-earth’ for want of a better term, more working class/middle class roots and thus don’t move in those powerful social circles. Possibly leading them, according to what Andrew is saying, to be more neglected politically. That’s just theorizing, but it’s hard under any interpretation of that argument to really blame them for that. If anything, it sounds like what’s required is more traditionally wealthy, socially well networked people calling Croydon home: then maybe we’d get more done!

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    • Let’s not digress into attitudes towards Croydon, and what the cause and effect might be (though interested to note that you say you mix in “upper class circles”. You should tell us more some time).

      Nor shall we go into the wrong-headedness of your conclusions about the secretive, half a billion-pound commercial development scheme which our council embarked upon as the economy was heading into the worst global recession in living memory (did anyone in charge at the Town Hall ever say: “Hmm. Might this affect property values?”?).

      But there are a couple of Nestle comments we will pick you up on.

      You say:

      “This means that the Nestle’s move was not predictable”

      Wrong. It was entirely predictable. How do we know? Because Nestle told the council nearly two years ago.

      By any stretch of imagination, that makes it predictable.

      Had the council responded any time in the past 24 months and done some sort of deal over alternative office accommodation, even at commercial rates in Croydon, then Nestle would have been locked in to at least a medium term contract to stay in Croydon, keeping all those jobs here, and unable to skip to cheaper accommodation elsewhere.

      But no deal was done. “Not for lack of trying,” Mike Fisher said (or words to that effect). So the failure is probably something more ingrained and deep-seated.

      There was, of course, an agreed scheme for St George’s Walk. This was cancelled around 2006, when the current adminstration took control of the council, but nothing concrete (pun intended) has replaced it. Might that have something to do with Nestle’s attitude?

      And then you go on to say:

      “It’s a far better thing that we have more, smaller and mid size businesses around; that way no one business can hold the council to ransom. So I actually think, provided we can get more, smaller businesses into the town centre, this is better in the long run, and not nearly the disaster that it has been reported as.”

      Ahh, the “not all eggs in one basket” strategy. Not at all bad, we agree on that.

      But consider this: what if this council does not manage to attract other businesses to the area? How many new businesses will it take to adequately replace in the local economy the 1,000 jobs that Nestle is taking away?

      And what is it that is going to attract these businesses to the area? Some businesses do like to gravitate geographically to other, larger concerns which may operate in the same sector. “Croydon, home of Nestle UK”, an important part of Croydon Council’s City Bid remember (so you can’t really start saying it is unimporant now they are going), ain’t going to do it much longer.

      Time will tell. It’ll be interesting to see who Fisher and his mates try to blame for their next costly, strategic failure.

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  7. Pingback: Croydon Loses The Icing On Its Cake « London Living

  8. James Naylor says:

    Nestle made the announcement that they were considering a move ages ago, but it isn’t clear that they ever made their true intentions to the council – that what they were really looking for was the kind of deal that Croydon probably can’t deliver: a modern building at a rock-bottom price; which is what they have in Crawley at the expense of poorer facilities for their staff, and certainly no improvement in their image.

    You say “some sort of deal”, but I notice your hazy on the detail here. Presumably, the council couldn’t purchase a building lease for any cheaper than Nestle could. So that means they’d have to have paid market price too (the market price that is presumably too rich for Nestle). They could lease it to Nestle for less; but I’m not sure you or I would approve of that, since it would essentially be a council tax subsidy for a very healthy multinational company. A company, which I am sure you will agree, has a a very dubious ethical track record.

    It would also set a very dangerous precedent for the council. Something along the lines of: “Looking for a rent discount? Come to Croydon council we’re desperate to keep you!” You also say they could have been ‘locked in’. But presumably, for anything other than a very good deal for them, Nestle’s lawyers would never have let them get locked in to anything.

    To me the deal you describe is exactly the sort of thing you and I would both condemn of since it would be precisely the sort of Crony Capitalism I mentioned before. Presumably the council did try to come to some sort of arrangement, but they simply couldn’t do a deal with Nestle that was cheap enough for them.

    Those fears are legitimate. Replacing the 840 jobs will be difficult (although most Croydon based workers will presumably stay on, we will lose the daytime retail footfall), and the knock-on co-location effect will be adversely affected a very little overall, realistically. Biggest of all, it is a PR loss.

    But it’s a PR loss that articles like yours make worse, not better because you play up Nestles side of the story, choosing to ignore the clear fact that this decision is not about deisreability; Nestle have made a cost-led decision here to move to a town that is, almost universally regarded as a less desirable locale.

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    • Isn’t it the reality that there is some form of publicly funded subsidy of all businesses, through the various services provided by councils and other part-public owned amenities? For instance, Nestle would never dream of providing a transport system to Croydon – or Crawley – for its staff equivalent to the railway network.

      The suggestion that Croydon Council could, if they had acted effectively, have locked Nestle into a deal assumed that this might have been done on more realistic terms than Nestle have achieved in Crawley. And realistically, once committed to new offices in Croydon, the Nestle management would not have wanted to endure the upheaval, and costs, of another HQ move in the mid-term.

      Of course, Nestle moving from Croydon is an economic and PR disaster.

      But it is a PR disaster created, once again, by Croydon Council through its mishandling of the negotiations over several years. Senior figures at the council having stand-up shouting arguments with Nestle management, as we understand may have been the case late last year, will not have helped Croydon’s case.

      But you seem to suggest that to ameliorate this PR disaster of the council’s creation, Inside Croydon ought not to have reported Nestle’s departure, nor to have provided the sort of analysis that Andrew Pelling wrote on Friday.

      Nor to provide you with the platform to air your own views.

      Hmmm.

      Like

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