Mumbai—Tata Starbucks has officially overtaken Café Coffee Day (CCD) to become the largest branded coffee chain in India, fueled by significant growth in outlet openings during the second quarter.
The joint venture between US coffee giant Starbucks and Tata Consumer Products opened 19 new stores and expanded into five new cities in the three months ending September 30, 2024. This growth brings Tata Starbucks’ total to 457 outlets across 70 cities.
In contrast, Bengaluru-based CCD has faced ongoing challenges, closing 19 outlets in the fiscal year ending March 31, 2024. This marks the fifth consecutive year of store closures for CCD, which has struggled under substantial debt revealed in 2019. CCD now operates 450 locations across India.
In January 2024, Tata Starbucks announced an ambitious target to reach 1,000 stores by 2028, focusing on smaller-format locations and expanding its presence in India’s Tier 2 and 3 cities.
Despite the expansion in outlets, Tata Starbucks has reported a decline in sales growth, dropping from 14% in the same quarter last year to just 2% this year—the lowest quarterly growth since the pandemic’s onset in late 2020.
During an investors call, Tata Consumer Products CEO Sunil A. D’Souza attributed the sluggish sales performance to broader demand trends affecting the quick-service restaurant (QSR) sector in India. He noted that foot traffic has been negatively impacted by inflation and a tightening of consumer spending.
Similarly, other fast-food chains, including McDonald’s, Burger King, and Pizza Hut, reported squeezed profit margins in the first quarter due to increased discounting strategies aimed at price-sensitive customers.
Currently, Tata Starbucks contributes approximately 8% to Tata Consumer Products’ consolidated revenue. The company reported a year-on-year revenue growth of 13% for the quarter ending September 30, 2024, reaching ₹4,214 crore ($501 million), with total consolidated net profit increasing by 8% to ₹364 crore ($43.2 million).
Related Topics:
From Empty Cups to Full Hearts: The Impact of Free Coffee Tuesdays
Fairfield University Unveils Alumni-Crafted Coffee and Beer
Mining billionaire cracks down on employees’ coffee runs