Costa Coffee cautious over expansion plans

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Chandigarh, Nov 14: Costa Coffee, an Italian style coffee brand, which is a part of British leisure group Whitbread has become cautious in selecting locations in India for opening new stores as the retail market faces the heat of economic slowdown.

Even though, the company officials say that the expansion will continue as per the plans but finding good locations is a big challenge in the present scenario.

Talking to FE on launch of Costa’s first outlet in Chandigarh, Anil Laroia, chief operational officer, Costa Coffee India said, “The recession has not hindered our growth but it has become difficult to find a suitable location for new outlets. We are ready to launch our stores in the IT parks at various locations but low occupancy levels there may delay the launch. This coupled with high rentals may slow down the pace but we expect market correction to happen within the next 3-4 months with stabilisation of situation. Despite this, we are carrying on with the expansion and aim to scale up the present 43 outlets in India to 75 by the end of February 2009.” Costa has also set up training academies at Mumbai and Delhi.

“Depending upon the new outlets, we may open more centres in Bangalore or up North,” said Anil.

Costa also started roasting its coffee beans in Bangalore for the Indian market by collaborating with Bayar’s Coffee in Bangalore early this year. Before this collaboration, the company was importing coffee beans from its roastery in UK. “Since April, we have delivered one order of roasted beans and now the second order is due for delivery,” said Paul Robinson, country head, Costa Coffee India.

He further added, “We have launched 10-12 new stores since April in cities like Panchkula, Delhi, Mumbai, Ludhiana, Karnal etc and soon our outlets will be coming up in Pune, Lucknow and about 10 new locations. We are also renovating our old stores as per the new concept and design. We have already changed the look of 4 stores in Delhi and 10-15 more stores will be renovated soon.”

Costa Coffee, which owns about 1,100 coffee outlets across 24 countries the world over at present, is eyeing to have 2,000 outlets globally within four years.