The Gurugram-based quick-service restaurant group said increased marketing activity and added value-driven food and beverage options were key contributors to its 45% year-on-year group sales growth in the first quarter
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DIL is currently promoting a 15%-off iced coffee and cake Costa Coffee Summer promotion | Photo credit: Costa Coffee
Costa Coffee’s Indian franchisee Devyani International Limited (DIL) has credited increased marketing activity and promotional offers as key to its strong first quarter revenues.
The franchise group opened 13 net new Costa Coffee stores in the three months to reach 192 outlets – nearly doubling its store count over the last 18 months.
Although a smaller contributor to DIL’s group sales than its licensed KFC and Pizza Hit businesses, Costa Coffee sales in India have increased 40% year-on-year to Rs. 455m ($5.4m).
Gurugram-based DIL implemented a Friday Rs. 149 ($1.78) coffee and snack deal across its Costa stores during the quarter and is currently promoting a 15%-off iced coffee and cake Summer promotion.
“We introduced innovative marketing campaigns, promotional offers and deals on our range of brands, enabling us to capitalise on seasonal trends. Despite micro-economic challenges, we remain focused on offering value-driven options to our consumers to adapt to market dynamics and drive growth,” said Ravi Jaipuria, Chairman, DIL.
India has been highlighted as a ‘priority market’ for UK-based Costa Coffee. In October 2023, the coffee chain’s CEO Philippe Schaillee said rising coffee consumption among India’s younger generation and a broad increase in disposable income levels is creating growth opportunities for the brand in the South Asian market.
DIL opened 67 net new Costa Coffee stores across India last year and forecasts it will add more than 40 new sites in its full-year ending 31 March 2025.
The franchise group achieved 45% year-on-year total sales growth in the three months ending 30 June 2024 to reach Rs. 12.2bn ($145m) – 17% higher than the previous quarter. Group EBITDA also improved during the period, growing 28% on a year-by-year and quarter-by-quarter basis to reach Rs. 2.2bn ($26.6m).
DIL’s KFC revenue in India grew 7% year-on-year in the first quarter to Rs. 5.5bn ($66m), while Pizza Hut sales fell 0.8% to Rs. 1.8bn ($21m). The two brands make up 80% of DIL’s total 1,473-store footprint in India with 617 and 570 stores respectively.
In a press release, Jaipuria highlighted a ‘highly promising outlook’ for QSR brands in India – with “robust economic growth, rising disposable incomes and increasing urbanisation” set to drive demand for the segment over the next nine months.