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Tue 6 Jul 2010 06:34 AM

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Costa chief targets Mideast as key area for growth

Managing director says sales up by 20% a year in Saudi, eyes more outlets.

Costa chief targets Mideast as key area for growth

The Middle East is Costa Coffee’s most “critical” area for growth with sales increasing 20 percent year-on-year in Saudi Arabia alone, its managing director has told Arabian Business.

Britain’s largest coffee chain currently has 228 stores in the region but sees more growth opportunities, John Derkach said on Tuesday.

“The Middle East is absolutely critical to Costa and certainly critical to our international growth ambitions,” he said.

“We’ve got just over 30 stores in Saudi now and we’re growing our like-for-like sales there at over 20 percent per year. That gives us strong encouragement to move on with our franchise partner and open more stores.

“We’re seeing the same sort of thing in Egypt. We have just under 40 stores in Egypt and the like-for-like [sales] there are 22 percent,” he added.

Whitbread-owned Costa Coffee has been its parent company’s star performer so far this year.

Same store sales increased 8.5 percent in the first quarter of the year while total revenue gained 27 percent, according to Bloomberg.

The firm opened 55 outlets in the first quarter of 2010 and plans 250 during the fiscal year. Derkach said these would be split 50/50 between the UK and international markets.

Whitbread opened its first international store in the UAE with its franchise partner Emirates Leisure Retail - a subsidiary of the Emirates Group - in 1999, and now has 75 stores in the country.

“I think there is still opportunity to grow in the UAE in general and there is still a lot of potential there for the future,” said Derkach.

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