Daijiworld Media Network - New Delhi
New Delhi, Jul 26: British coffee chain Costa Coffee reduced its retail footprint in India for the first time in more than five years, even as its business continued to register revenue growth during the 2025-26 financial year.
According to the latest annual report of its exclusive India franchise partner, Devyani International Limited (DIL), Costa Coffee operated 198 outlets at the end of FY26, compared with 220 cafes a year earlier. The closure of 22 net stores marks the first contraction in the brand's network since its sustained expansion began in FY21.
Despite the reduced number of outlets, Costa Coffee reported 7 percent growth in revenue from operations, which rose to Rs 212.5 crore in FY26 from Rs 198.5 crore in the previous fiscal year.
The growth rate, however, was slower than FY25, when revenue had surged 30.76 percent, driven by an aggressive increase in store count from 179 outlets to 220. The latest figures indicate that the company generated stronger sales per outlet, signalling a greater emphasis on improving store productivity rather than rapid expansion.
Costa Coffee's presence in India had grown steadily over the past five years, increasing from 44 stores in FY21 to 55 in FY22, 112 in FY23, 179 in FY24, and 220 in FY25, before declining to 198 stores in FY26.
While the annual report did not cite specific reasons behind the outlet closures, Devyani International said it had followed a more disciplined and selective expansion strategy across its businesses during the year.
Even with the rationalisation of stores, the company reaffirmed its commitment to expanding the Costa Coffee brand, identifying it as one of its major long-term growth engines alongside KFC and Pizza Hut, which it operates under franchise agreements from Yum! Brands.
DIL said Costa Coffee is strengthening its position in India's premium café segment by focusing on Gen Z and millennial consumers. The company noted that the brand's youth-oriented positioning has enhanced its appeal among students and young professionals seeking cafés as social and work-friendly spaces.
During FY26, Costa Coffee also introduced several new food and beverage offerings aimed at matching evolving consumer tastes and preferences.
The company remains optimistic about the brand's long-term prospects in India. In April 2025, Costa Coffee Global CEO Philippe Schaillee had described India as one of the company's top 20 global markets, expressing confidence that it could become one of Costa Coffee's top five markets worldwide in the years ahead.