Costa Coffee India cuts 22 stores in FY26 as revenue rises 7%
Costa Coffee India’s network declined from 220 outlets in FY25 to 198 in FY26—its first contraction in five years—while revenue increased 7% to Rs 212.5 crore. Franchisee Devyani International said it is taking a more selective approach to expansion.
What happened
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
Key facts
- 198 outlets in FY26
- 220 outlets in FY25
- 22 net cafe reduction
- Revenue of Rs 212.5 crore in FY26, up 7% year-on-year
- Revenue of Rs 198.5 crore in FY25, up 30.76%
- 44 outlets in FY21
- 55 outlets in FY22
- 112 outlets in FY23
- 179 outlets in FY24
- India is among Costa Coffee's top 20 markets globally, with an ambition to enter the top five
Why this matters
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
- FY27 net store additions versus further closures, including whether closures are concentrated in a few cities.
- Same-store sales growth, average transaction value and transaction-volume trends at the remaining 198 outlets.
- 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.
- 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.