Are You Coasting on a Captive Market?

When you stop trying because the customer has no other option, you haven’t won. You’ve just started losing differently. This post unpacks the danger of monopolistic thinking. How businesses like Costa Coffee thrived not just by owning space, but by playing harder, faster, smarter. We also explore what happens when smaller businesses mimic monopolies for comfort, without the clout.

The Costa Illusion

Whitbread once brewed beer. That was their game. Then they saw where things were going.

By the early 2000s, they dropped brewing altogether. But they kept Costa Coffee.

Why?

Because hospitality, rather than hops, was where the margins were shifting. They didn’t just pivot; they pounced. And by the time they sold Costa to Coca-Cola in 2018 for £3.9 billion, they’d turned coffee into a full-blown retail empire.

But here’s the twist: Costa didn’t dominate because it had a monopoly. It dominated because it acted like it didn’t.

Every bean, every store, every advert told the customer, “You could go somewhere else yet we’ll make sure you don’t want to.”

Compare that to your average supermarket café.

Breakfast menus close at noon. No lunch before twelve. The coffee is functional. The service polite. But you feel it: this place isn’t hungry. It’s just open.

Monopoly Isn’t a Structure. It’s a Mindset.

When you’ve got the customer anyway, because you’re the only café in the supermarket or the only hotel on the high street, you start thinking like a monopoly.

• You stop competing.

• You stop delighting.

• You stop noticing.

Because why bother?

Here’s the danger: customers don’t stay captured. They drift. They resent. And one day, they switch. Not with anger but with indifference.

Even Whitbread learned this. When activist investors came knocking, they didn’t say, “Well done, Costa.”

They said: “Split it up. You’re sitting on more value than you’re extracting.”

That’s the difference between being in control and staying sharp.

The Small Business Trap

Take the village pub.

It’s the only game in town. So the food standards slip. Maggots in the bins. Menu inconsistencies. Shifts that run on luck and habit.

Some staff care. Others coast. No one agrees on the standard—because they don’t have to.

Now picture this same pub with a rival opening nearby. What happens?

Suddenly, the napkins get ironed. The toast isn’t burned. The beer lines are cleaned more often.

It’s not the competition that changes things. It’s the threat of being chosen against.

Frequently Asked Questions

Q: Isn’t a monopoly good for business?

Only if you keep earning it. A monopoly without momentum creates laziness. Laziness breeds fragility. Then one day, someone hungrier takes your crown—and you didn’t even see them coming.

Q: How do I know if I’ve slipped into monopolistic thinking?

If you’re saying “it’s fine as it is,” or “where else would they go?”—you’ve already slipped.

Q: But what if I don’t have real competition?

Then create internal competition. Set higher targets. Surprise your regulars. Act like every day’s a pitch for their loyalty.

Q: Isn’t this just about big companies?

Not at all. Big companies fall slower. Small businesses can fall overnight. Monopolistic thinking hurts smaller teams more, because they’re often built on reputation and repeat visits.

Audit your edge. Ask yourself: Would my customers still choose us if they had real alternatives tomorrow? What would we change if a rival opened next door?

Then re-read the FAQs above. They’re not just warning signs—they’re a checklist for staying alert, alive, and ambitious.

Because whether you’re running a café, a consultancy, or a village pub…

You’re only as good as your last customer’s choice.

Bonus Reading: The Rhythm Is Always Here reveals how hidden business cycles play out across decades—and how to spot when it’s time to break your own pattern before the market does it for you.