The Bengaluru-based coffee chain, which has seen its store footprint shrink by nearly three quarters since 2019, closed 26 further outlets last year but saw sales rise and losses narrow after implementing debt management strategy
Café Coffee Day now operates 469 stores across India, 73% less than at its peak | Photo credit: Café Coffee Day
Indian coffee chain Café Coffee Day continues to plot a path towards profitability, with group debt narrowing following rising sales and continued store closures.
Café Coffee Day’s full-year results for the 12 months ended 31 March 2023 show the coffee chain now operates 469 stores across India, 26 fewer than the year previous and 73% less than at its peak.
However, revenues from Coffee Day Enterprises’ coffee shops have increased significantly to Rs 869 crore ($105m) from Rs 149 crore ($19.3m) in 2022 and comprised 94% of Coffee Day Enterprises’ turnover for the 12-months. Full-year sales reached Rs 1,653 crore ($200m) in 2019.
Furthermore, losses narrowed over the year to Rs 68 crore ($8.2m) from Rs 112 crore ($13.5m) in 2022.
Founded in 1996 as a subsidiary of Coffee Day Enterprises, Café Coffee Day grew to 1,752 outlets across 243 Indian cities in 2019 before heavily shrinking its footprint in the wake of spiralling debt and the apparent suicide of the chain’s founder V.G. Siddhartha.
Alongside retail outlets, Café Coffee Day also operates vending machines within corporate offices and business hubs across India. The café chain said its vending machine footprint is now close to reaching 50,000 units, still 7,000 shy of its 2019 total but higher than the 45,217 at the end of its 2022 fiscal year.
Café Coffee Day’s strategy to manage its debt overhang by closing stores comes as both domestic and international coffee chains are seeking growth in India’s opportune branded coffee shop market.
Domestic coffee chains have gained significant ground in India in the last six months, with New Delhi-based Barista seeking to reach 500 stores in India by 2025, specialty coffee chain Blue Tokai targeting 200 coffee shops after raising $30m to fuel outlet growth and Nothing Before Coffee outlining plans to rapidly scale its café network across the next 12 months by up to 80 new outlets.
International chains are also seeking to expand in the country as India’s increasingly affluent younger demographic drive out-of-home coffee consumption.
Tata Starbucks, which ended its fiscal year ended March 2023 with 333 stores across 41 cities in India, has set its sights on further expansion while Costa Coffee is pursuing a ‘cluster-based approach’ to expansion across India to boost its 115-store network across the country’s ‘top eight-10 cities’.
Additionally, Canada's Tim Hortons plans to open 120 stores across the country within the next three years and UK-based coffee and food-to-go Pret A Manger is targeting 100 outlets across India within five years following its market entry in April 2023.