CCD to add close to 70 stores by March

Cafe Coffee Day is going ahead with its expansion plan and will add around 70 more outlets by the end of the fiscal, a top company official has said.

 

Cafe Coffee Day, a part of Amalgamated Bean Coffee Trading Company, now operates close to 1,550 outlets spanning across 200 cities in three formats -- lounges, cafes and kiosks.

 

"We are (having) 1,547 stores right now and we will add 60-70 stores in the next four-five months," CCD director Venu Madhav told PTI here.

 

Madhav further said new outlets will come up in both big and small towns, with the expansion remaining skewed to large cities. Smaller towns don't offer too many opportunities as you can have maximum four-five cafes there, he said adding in large cities you can go beyond 100-200 stores.

 

The company will invest close to Rs 40 lakh on each store, he added.

 

For the next few years, the company will continue with its robust expansion plans, Madhav said.

 

It is estimated that there are 2,000 cafes in the organised space, with CCD being the market leader. It largely competes with Starbucks, Barista Lavazza chain, Costa Coffee.

 

Madhav admitted that consumer discretionary spending has gone down following the lingering slowdown.

 

"The retail sector in particular is going through tough times now, because the cost is going up, the consumer discretionary spend is coming down. But there is a lot of latent demand, so all of us are going ahead with our expansion plan," he said.

 

However, he said, "The average consumer spend is good with us. The effect is not that much more pronounced on us and so we are going on with our expansion plans."

 

Beverages at present dominate the portfolio and the company will increase food share, Madhav said.

 

"Higher%age is beverages followed by food. That is why with formats like lounges, we are seeing how we can up the food consumption," he added.

 

He did not give the break up of the mix, but said the company wants to increase the share from food by at least 2-3%.

 

Because of high input cost due to inflation, CCD has seen some reduction in its margins but ruled out any immediate price hike. "We have not yet thought about the price hike. Maybe in April that is when we normally look at pricing," Madhav said.