Costa Coffee Shuts 22 Outlets in India in a Strategic Move
July 30 - 2026
Coffee Geography Magazine
British coffee chain Costa Coffee has reduced its retail footprint in India for the first time in over five years, closing a net 22 stores during fiscal year 2026 (FY26), according to the latest annual report from its exclusive franchise partner, Devyani International Limited (DIL). Despite the contraction, the brand reported a 7% year-on-year revenue increase in USD terms, signaling a strategic shift toward quality over quantity in one of its key emerging markets.
As of the end of FY26, Costa Coffee operated 198 stores across India, down from 220 outlets in the previous financial year. The net reduction marks a sharp departure from the brand’s rapid expansion streak, during which it more than quadrupled its store count—from 44 outlets in FY21 to 220 by FY25.
Revenue from operations, however, grew to approximately $24.7 million in FY26, compared to roughly $23.1 million in FY25. This growth contrasts with the previous fiscal year, when revenue surged 30.76% alongside a rapid increase in outlets. The company’s expansion trajectory had seen it grow from 55 stores in FY22 to 112 in FY23, before climbing to 179 in FY24 and peaking at 220 in FY25.
DIL, which also operates KFC and Pizza Hut franchises in India, did not specify the reasons for the store closures. However, the company noted in its report that it adopted "a more disciplined and selective approach to expansion" across its entire brand portfolio during the financial year.
Despite the reduced café footprint, the company continues to identify Costa Coffee as a core growth driver alongside its quick-service restaurant brands. The chain’s India strategy remains focused on the premium out-of-home coffee segment, with younger demographics—including Gen-Z and millennials—constituting a vital part of its target audience. In response to evolving consumer preferences in India’s organized café market, Costa has also been actively refreshing its menu offerings.
The reduction in outlets during FY26 indicates a recalibration of physical expansion after the brand added 176 stores between FY21 and FY25, a period of aggressive growth that may have led to oversaturation in certain locations or underperforming assets.
India remains a cornerstone of Costa Coffee’s longer-term global ambitions. In April 2025, Costa Coffee Global CEO Philippe Schaillee identified India as one of the company’s top 20 markets globally and projected that the country is expected to become one of its top five markets in the coming years.
Industry analysts suggest that the current consolidation phase could be a prelude to more sustainable, profitable growth, allowing the chain to optimize its real estate portfolio and per-store sales before resuming expansion with a sharper focus on high-footfall, high-margin locations.