| LONDON, April 24
LONDON, April 24 British hotel and coffee shop
operator Whitbread is on the hunt for high street stores
in Paris as it looks to expand its ever-growing Costa Coffee
chain into France.
Costa has grown rapidly in Britain to 1,500 outlets as
demand grows for coffee on the go, and is set on increasing that
to 3,500 globally by 2016, with a 500-store target in China a
Some analysts warn, however, that expanding in China through
joint ventures may not yield big profits for some time and that
greater exposure to developed European markets could offer
bigger rewards and complement growth in an increasingly
competitive British market.
U.S. rival Starbucks has already opened dozens of
outlets in France in an attempt to compete with the thousands of
family-run cafes along boulevards in Paris and other cities.
Costa has been running stores at travel hubs in Spain,
Portugal and at the Gare de Lyon rail station in Paris to help
gauge further interest in the brand. In February it said early
signs were "very encouraging".
It is now on the hunt for central Paris outlets, according
to an advertisement seen by Reuters from property agent Harper
Dennis Hobbs, which is looking for shops for Costa on busy high
streets in the French capital.
Harper Dennis Hobbs and Whitbread both declined to comment.
A spokeswoman for Whitbread said it would open a Costa store at
Nice airport in southeast France by the end of April.
Costa, which also has vending machine and wholesale
offerings, has over 900 outlets overseas, mainly via franchises,
in around 25 countries such as Poland, India and Saudi Arabia.
China is its second-biggest market, with 250 outlets.
"While higher risk, there could be a bigger profit pool in,
say, France and Germany than in China," Morgan Stanley analysts
said in a recent note.
They said Costa was already generating around 80 million
pounds ($122.13 million) in earnings before interest and tax at
British retail stores, which was around 10 times what it might
make in China in three to five years.
Whitbread, which also runs British hotel chain Premier Inn
and the Beefeater and Brewers Fayre pub restaurant chains, makes
almost all of its 1.8 billion pound annual revenue in its home
market, with Costa generating around 30 percent of the total.
Shares in the company, which will post its preliminary
results next Tuesday, have risen 39 percent in a year.