Cafe Coffee Day to shut down 30 stores, but all set to add another 100

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Mumbai | Published: October 27, 2017 5:00:21 AM

Coffee Day Global-owned cafe chain Cafe Coffee Day (CCD) plans to shut around 25 to 30 stores this year.

At the end of the first quarter of this financial year, the company had a network of 1,694 outlets across the country. (Reuters)

Coffee Day Global-owned cafe chain Cafe Coffee Day (CCD) plans to shut around 25 to 30 stores this year. However, plans are also afoot to add around 100 stores as the company focuses on improving profitability, senior CCD executives said. At the end of the first quarter of this financial year, the company had a network of 1,694 outlets across the country. Shuttering down loss-making stores has helped CCD improve its same store sales growth (SSSG) over the last one year, said Venu Madhav, chief executive officer, Cafe Coffee Day, at a post Q1 earnings conference call. Coffee Day Global recorded 6.94% year-on-year SSSG in Q1FY18, while it registered only 5.2% SSSG all of last financial year.

In FY16, the growth in SSSG stood at 5.4%.“Improving our menu, expanding our dessert portfolio, adding burger, pizza, biryani and a new range of beverages along with shutting down small-size cafés has helped us improve our SSSG. We will continue to shut the smaller stores of around 500 to 600 sq ft as we are focusing on opening bigger stores of around 1,200 to 1,400 sq ft.” While net profit of Coffee Day Global grew 81% year-on-year to R10.3 crore in Q1FY18, gross revenue stood at R504.7 crore, up 14% from a year ago. EBIDTA of the company grew 20% year-on-year in Q1FY18 to R71.4 crore.

Experts said that the company has been focusing on shutting loss-making stores in the last couple of years, which has helped the company improve its profitability. “In the past two years, management closed smaller size stores of around 500 to 650 sq ft as these stores were cluttered and left customers wanting for more. Also, improving food quality and variety has enhanced throughput during non-peak hours, mainly during lunch time.

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