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Costa Coffee India cuts 22 stores in FY26 as revenue rises 7%
Our read
Costa Coffee India’s 22-store reduction despite 7% revenue growth signals a shift toward pruning weaker outlets and prioritizing unit-level productivity over footprint expansion.
Watch
Same-store sales growth, average transaction value and transaction-volume trends at the remaining 198 outlets.
Ask next
The report,
Costa Coffee India’s network fell 22 stores to 198 in FY26, its first decline in over five years, while revenue rose 7% to Rs 212.5 crore. Franchisee Devyani International cited a more disciplined, selective expansion approach.
Reported figures
From the report. Source details below
| Revenue of Rs 198.5 crore in FY25, up | 30.76% |
|---|
Also in the report
- India is among Costa Coffee's top 20 markets globally, with an ambition to enter the top five
Other figures
- 220 outlets in FY25
- 44 outlets in FY21
- 55 outlets in FY22
- 112 outlets in FY23
Why it matters to operators
Devyani International’s more selective expansion approach may create opportunities to acquire or partner around proven high-traffic formats, while underscoring the need for disciplined site selection in India’s crowded café market.
What to watch next
- FY27 net store additions versus further closures, including whether closures are concentrated in a few cities.
- Costa India revenue growth relative to outlet count; sustained growth above store growth would signal improving productivity.
- Devyani International commentary on café-level EBITDA margins, lease renegotiations and return-on-capital hurdles.
- Mix of new outlets by format and location, particularly kiosks, travel retail, food courts and corporate sites.
- Competitor expansion pace, promotional intensity and coffee-price inflation affecting customer traffic and gross margins.
Likely next moves
Our read of what comes next — analysis, not reported by the source.
- Close or renegotiate leases for underperforming high-street stores and concentrate the portfolio in proven catchments.
- Increase emphasis on premium cold beverages, food attach rates, loyalty offers and delivery to raise average ticket and store throughput.
- Shift new openings toward asset-light or lower-capex formats, including kiosks, transit hubs, malls and institutional locations.
- Use tighter location-level return thresholds and slower franchisee-led rollout targets.
- Benchmark store economics against Starbucks, Tim Hortons, Third Wave Coffee and local specialty chains, especially in major metros.