In Focus
FRANCHISING | Staff Reporter, China

Costa Coffee's new goal: 1,200 stores in China by 2022

The announcement follows notable competitors' expansion plans in the country.

The coffee market in China continues to heat up with Costa Coffee's announcement that it has bought one of their joint venture partners in China.

This will enable the brand to have full control of stores outside of Beijing and dramatically increase its target number of sites by 2022 to at least 1,200.

Currently, they stand at over 440 stores in the country with plans to open an additional hundred sites and new products already in the pipeline.
Whitbread announced the buy-out of the 49% share in the South China joint venture held by Yueda – whose operation comprised of approximately 250 stores – for RMB 310 million (£35 million) last October 2017.

Costa says that the earlier partnership with Yueda was “essential” in the brand’s “first phase” of development but added that full control would enable them to have a “greater level of focus on improving the overall proposition and reshaping the store network.” Citing their strategy to focus on “core cities”, 39 stores were closed in the year.

Costa’s other joint venture partnership with BHG in North China will remain unaffected.

“The experience gained from Costa’s trials provides confidence in the customer offer and the opportunity to extend the store network to more than 1,200 stores by 2022, with significant opportunity beyond this over the longer term.”

The announcement was made in the middle on ongoing steps to demerge the coffee brand from Whitbread, its parent company based in the United Kingdom.

“Costa will become a listed entity in its own right and the clear market leader in the out-of-home coffee market in the UK. Costa will also be well positioned to build further on its strong international foundations with growth expected in China and Costa Express,” Whitbread said in a full-year report.

Costa’s total international sales growth rose 4.9% in the first quarter of the year, outperforming their UK segment that experienced reported a 2% decline in like-for-like sales due to footfall in traditional shopping locations.

Globally, total sales grew by 5.2% in the quarter due to new stores and Express machines.

(Also read: Costa Coffee UK sales fall by 2% in Q1 2018)

(Photo courtesy: Costa Coffee UK)

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