Costa Coffee India Store Count Falls to 198 in FY26 Despite Revenue Growth

Costa Coffee's outlet network in India declined for the first time in more than five years, with the British coffee chain ending FY26 with 198 stores compared to 220 outlets a year earlier, according to the latest annual report of its exclusive franchise partner, Devyani International Ltd (DIL).

Despite the reduction of 22 cafés, Costa Coffee reported revenue of Rs 212.5 crore in FY26, up 7 percent year-on-year. The performance suggests a shift from network expansion towards improving revenue generation from existing locations.

The decline marks a break in Costa Coffee's expansion trajectory in India. The brand operated 44 outlets in FY21, increasing to 55 in FY22, 112 in FY23, 179 in FY24 and 220 in FY25 before the contraction in FY26.

While the annual report did not specify reasons for the store closures, DIL stated that it followed "a more disciplined and selective approach to expansion" across its portfolio. Costa Coffee remains a key growth brand for Devyani International alongside KFC and Pizza Hut. The company said it is "continuing to strengthen Costa Coffee" as part of its long-term strategy.

The brand is focused on India's premium out-of-home coffee segment, targeting Gen-Z and millennial consumers. According to DIL, Costa Coffee has positioned itself around social spaces designed for young professionals and students, supported by menu innovations introduced during FY26.

The development comes at a time when competition in India's café market is intensifying. Costa Coffee competes with international brands such as Starbucks, Tim Hortons and McCafe, while domestic chains including Cafe Coffee Day, Blue Tokai, Third Wave Coffee and Barista continue to expand their presence.

Costa Coffee Global CEO Philippe Schaillee had stated in April 2025 that India is among the brand's top 20 markets globally and is expected to become one of its top five markets in the coming years. Against this backdrop, Costa Coffee's latest performance indicates a growing emphasis on store productivity and operational efficiency rather than rapid network growth.