Costa Coffee is a subsidiary of the global beverage giant, The Coca-Cola Company.
Despite the decrease in outlets, Costa Coffee’s revenue rose by 7% year-on-year, reaching ₹212.5 crore in FY26. In FY25, revenues from operations surged by 30.76% to ₹198.5 crore, largely due to store expansion, with the outlet network increasing from 179 to 220.
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The increase in revenue during FY26 occurred even as the store count fell, emphasizing a shift from growth via store network to higher revenue per outlet.
The closure of 22 cafes signifies a departure from Costa Coffee’s expansion trajectory that started in FY21, when the company had only 44 outlets in India. The store count had consistently grown each year thereafter — to 55 in FY22, 112 in FY23, 179 in FY24, and 220 in FY25 — before the drop in FY26.
While the annual report did not elaborate on the reasoning for the store reduction, DIL noted it was taking “a more disciplined and selective approach to expansion” across its brands.
Costa Coffee’s Global CEO Philippe Schaillee mentioned in April 2025 that India ranks among the top 20 markets for Costa Coffee and is expected to be within the top five markets soon.
DIL, in its annual report, stated it is “continuing to strengthen Costa Coffee.” Moreover, alongside its other Yum! Brands (Pizza Hut and KFC), Costa Coffee plays a crucial role in the company’s growth strategy.
The brand aims to tap into the premium, out-of-home coffee culture in the country, particularly targeting Gen Z and millennials.
With its youth-focused rebranding, Costa Coffee has established itself as the go-to choice for coffee enthusiasts looking for an upgraded ambiance that serves as ‘social spaces’ for young professionals and students, said DIL.
Additionally, FY26 saw the introduction of several menu innovations that align with these emerging trends.
DIL, which holds franchises for other Yum! Brands such as Pizza Hut and KFC, as well as Tealive, New York Fries, Sanook Kitchen, and local brands like Vaango and the Food Street, is currently proposing a merger with Sapphire Foods India.
In India, Costa Coffee faces competition from international brands like Starbucks, Tim Hortons, and McCafe, along with local chains such as Cafe Coffee Day, Blue Tokai, Third Wave Coffee, and Barista, all vying for a stake in India’s rapidly growing cafe market.
The cafe culture in India is emerging as a niche growth opportunity, fueled by a notable transition from tea to specialty coffee among Gen Z and millennials.
Shares of Devyani International rose nearly 2% to close at ₹112 on Friday.
