Costa Coffee to open 200 more stores in India by 2015

The expansion may entail an investment of around Rs 200 cr

Costa Coffee, the coffee shop chain brand under the UK-based multinational hotel, coffee shop and restaurant company Whitbread, is looking at expanding its presence in India with another 200 outlets within 2015, which would require an investment of around Rs 200 crore. The company, which claims as the world's second largest coffee chain,is planning to add around 1,000 outlets across the country by 2015-16, according to company officials.

The company has already set up 100 coffee shops in various parts of the country through its master franchisee, Devyani International Ltd (DIL), a part of Rs 3000 crore RJ Corp.

"In the last two years, we have been growing faster, with expanding presence in overseas market (outside UK)," said Andy Marshall, managing director EMEI, Whitbread.

"We have 2,500 outlets as of now and our plans are to expand it to 3,500 outlets in the financial year 2015-16 in 28 countries. We see a great potential for the business in India," he added.

The master franchisee, Devyani International, which is also franchisee for PizzaHut and KFC in select regions in the country, said that it would focus on the major cities for expansion in the next two years and would look at the tier II markets for expansion after the two years.

Each Costa Coffee outlet would require an investment of around Rs 80 lakh to Rs 1 crore and in this proportion, DIL is expecting an investment of Rs 200 crore into the expansion in next two years.

"We dont believe in bringing in more franchisees into the business and all the new stores would be opened by us only. We will fund it through debt and equity," said Virag Joshi, president and CEO, DIL. He was speaking to the reporters during the inauguration of the second coffee shop in Chennai.

At present the coffee shop has presence in Delhi,Mumbai, Pune, Jaipur, Chennai and Bangalore. There are plans to open more shops in the South Indian major cities, Chennai and Bangalore, in near future, added Joshi.

The store opened in Chennai would serve over 25 varieties of hot and cold coffee and flavoured drinks along with a range of snacks and food items. The company has made supply chain arrangements with TajSats catering firm, added the company officials.

The UK-based Costa Coffee currently has a sales of One Billion Pound Sterling and plans are to double it in next four to five years through various plans including aggressive expansion overseas, added Marshall.