CCD & Starbucks India record profits in Q4

In what could be a sign of a revival in the casual dining cafe business, India’s homegrown Cafe Coffee Day as well as international coffee giant Starbucks have reported fantastic numbers for Q4 FY21-22, that is from Jan. – Mar. 2022. Cafes were one of the worst hit formats in the F&B industry when the first lockdown was announced in Mat. ‘22.

Most restaurants began with home delivery of their food, by themselves as well as through food-tech apps like Swiggy & Zomato. However, cafes are considered the third place of choice after home and work. Further, restrictions on seating (at cafes) and a general tendency by consumers to avoid sitting next to someone were reasons enough for 100s of cafes across India to be shut down. Cafe Coffee Day has shut down over 800 cafes across the country and has reported 495 operations outlets as of 31 Mar. 2022. Starbucks on the other hand operates 268 cafes in India.

For the year ended FY21-22, Coffee Day reported a turnover of Rs. 496.26 Cr, a growth of 23.81% over the previous financial year. Starbucks on the other hand reported a turnover of Rs. 636 Crores. ASPD – Average Sales per day at CCD grew 11.58% to Rs. 17,140 while it seems to be Rs. 65,000 for Starbucks. It must be noted that the food to beverage ration is 3 times more at Starbucks compared with CCD.

While Coffee Day has been reeling under multiple pressures – the sad demise of Founder VG Siddhartha, as well as financial woes, the company has taken some strong decisions to close non-performing and loss making cafes across India, while ensuring continuity in business operations like before, though regulars say many patrons sat that there is an immediate infrastructure intervention that is required along with a complete rehaul of the menu. Starbucks, on the other hand with all its might on its own as well as with the immense support of the Tata Group has not been able to make profits in its decade old operation in the country. It has also not been scaling massively with the capital infusion it can manage, while the last two years have not helped their growth either.

All said and done, the Q4 numbers of the only two listed entities in the cafe space (Starbucks numbers are provided by parent TCPL) signify that customers are now out in the open to enjoy their me-time with groups and crowds, while the supposedly Omicron variant, the hyped fourth wave and the new B-type variants are not deterring them.

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