British coffee chain Costa Coffee has reworked its India strategy to turn profitable and expand its footprint. The new strategy involves closing unprofitable locations, segmenting strategy for different locations, changing the look and feel of outlets and customising the menu to better suit the Indian palate.
The chain, has a master franchisee agreement with Devyani International, a subsidiary of Ravi Jaipuria owned RJ Corporation.
“The biggest mistake was to try and replicate the same UK model in India, when it was launched in 2005. We found that the UK model is not working in India where people look at coffee shops as a meeting place. So we had to alter the format and the ambience of the chain,” said Santhosh Unni, CEO at Costa Coffee.
The company is now planning to open stores only in the metros in the next three to four years. Since Costa is an urban format, location plays a crucial role as per him. The company plans to penetrate more in the south of India because that covers three important metros and there is a huge coffee drinking population. The company is planning to expand its outlets to about 250-300 by 2014.