Costa Coffee China sales outpace home market

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(Source: Inside Retail Asia | July 2, 2018)

UK-headquartered Costa Coffee says sales in China have underpinned solid growth in its Asian operations.

Costa has 459 stores in China, where sales rose 4.9 per cent in the first half year as Chinese continue to boost their coffee consumption.

The company plans to open a further 100 stores in China before Christmas and is expanding its range to suit local tastes, after items such as Cold Brew and Character Roast performed well.

Costa is also steadily expanding its network in other Asian markets, including Singapore where it has about 10 outlets, and Cambodia.

Globally, Costa Coffee achieved a 5.2 per cent rise in first-quarter sales, helped by new store openings and the popularity of its Costa Express machines. However, like-for-like sales in its UK home market fell 2 per cent, reflecting the challenges faced by most retailers on high streets currently.

Costa’s parent, brewer Whitbread, is considering options to spin the business off in a separate listing, but has reportedly since been courted by private equity firms seeing an opportunity to grow the business internationally.

TPG, Bain Capital and CVC could pave the way for a sale of the brand realising as much as £3 billion.

In the UK, Costa Coffee has 2467 stores, a mix of company-run and franchised stores. As it encounters trouble on high street locations, the company is shifting focus to high-traffic locations such as airports and petrol stations.
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