UAE sales froth up Costa Coffee’s fortunes

British coffee shop chain set to reach 100 outlets across the UAE by 2012
UAE sales froth up Costa Coffee’s fortunes
Costa Coffee has over 1,200 shops in Britain and more than 650 in 25 other countries
By Claire Ferris-Lay
Thu 28 Jul 2011 07:53 AM

Costa Coffee,
Britain’s largest coffee shop chain, plans to hit its goal of 100 coffee shops
in the UAE two years ahead of schedule and may boost its number of stores by a further
50 by 2014, its COO said Wednesday.

Whitbread-owned
Costa Coffee, which operates 80 stores in the Gulf state, has seen a 15 percent
increase in like-for-like sales – the bulk of which is being driven by Arab
clientele, Andy Marshall told Arabian Business.

[In
January 2010] we suggested 100 coffee shops by 2014 but I think we’ll get to
that number by 2012,” he said. “We have pushed the pedal down and are now
moving much faster. I’d like to think that we can get towards 125 and then up
to the maximum 150.”

Costa Coffee, which has over 1,200 shops in Britain and more
than 650 in 25 other countries, is ramping up its expansion plans abroad as it
aims to capture a bigger share of the market from its competitor, US-based
Starbucks.

Starbuck’s store count topped 17,000 worldwide earlier this
year, but Costa is racing to match its rival in the fast-growing emerging
markets.

Whitbread said in June it planned to double the size of
Costa Coffee worldwide – one of its best performing entities - to 3,500 stores.

The coffee brand has largely bucked the global downturn, seen
as affordable luxury by cash-strapped consumers. Total sales across the chain increased
9.2 percent to June 2 while sales in new coffee shops had increased four percent,
Whitbread said.

Finance director Chris Rogers in June reiterated the group's
commitment not to raise the price of Costa Coffee, despite coffee prices
hitting a 34-year high in May.

Costa has seen like-for- like sales in Saudi Arabia,
the Gulf’s wealthiest economy, increase 30 percent, said Marshall. The firm
also has imminent plans to roll out ten more stores in Abu Dhabi.

“Abu Dhabi is a place where we see strong growth and I know
that we’ve got a good pipeline of new openings there and it’s an important emirate.
I think we’ve about ten more openings, which will come from Abu Dhabi,” said
Marshall.

“I think we’ll start looking at some of the other emirates
as well because I think they do provide opportunity in selected premium malls
and retail parks,” he added.

With a growing Arab clientele, Costa is making efforts to
customise its menu. Around 25 percent of Costa Coffee customers are UAE
nationals and expatriate Arabs, said Marshall.

“The largest sector of our consumer is local Arabs and Arab
expats. We will be launching a date cooler to meet that Arab Ramadan need and
then we’re looking at date and Arabic sweet cakes to compliment that,” he said.

Whitbread opened its first international store in the UAE in
1999, with its franchise partner Emirates Leisure Retail, a subsidiary of the
Emirates Group.

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