British coffee chain Costa Coffee, operated by Devyani International Limited (DIL), witnessed a decline in its store count in India for the first time in over five years. The number of Costa Coffee outlets reduced from 220 to 198 at the end of FY26, indicating a net closure of 22 stores. Despite this decrease, the revenue from operations for Costa Coffee in India rose by 7% year-on-year to Rs 212.5 crore during FY26.
The reduction in store count marks a shift from the brand’s previous trend of continuous expansion since FY21. While the revenue growth in the previous fiscal year was substantial at 30.76%, the recent performance highlights a move towards enhancing revenue generation per outlet. Costa Coffee’s network had been steadily growing over the past five years, reaching 220 stores in FY25 before the contraction in FY26.
Devyani International Limited attributed the store reduction to a more disciplined and selective approach to expansion across its portfolio. Despite this, the company remains committed to the growth of Costa Coffee, considering it a key driver alongside Pizza Hut and KFC. Costa Coffee’s strategic focus remains on India’s premium out-of-home coffee market, targeting Gen-Z consumers and millennials, with a repositioning towards a youth-centric brand.
