Australian coffee chain Gloria Jean’s Coffees said it is breaking even in India, four years after opening there.

Gloria Jean’s Coffees was launched by franchisee Citymax Hospitality in India in 2008. The chain now has 15 outlets in the country with sales growing by eight to 10 per cent annually. The number of stores is expected to reach 40 by year-end.

Expansion plans will include between 30-40 store openings yearly and sub-franchise development. The total number of outlets in India is expected to hit 250 in the next four years.

However, like other cafe chains, Gloria Jean’s Coffees is rueing high rentals in India which are eating into its profit margin.

“Café chains do not have high margins and to get the right rentals at malls and high streets will always be a challenge. While there is demand for cafes, there is not enough supply of properties due to which most of the players are suffering,” said Citymax Hospitality president Vishal Sawhney.

But this has not deterred Gloria Jean’s Coffees from continuing to expand, with a new outlet in Colaba Causeway in South Mumbai is now being prepared for opening.

Gloria Jean’s Coffees competes with other international premium coffee chains including Australia’s Di Bella and the UK’s Costa Coffee. While it braces for the entry of American coffee chain Starbucks, Sawhney believes there’s enough room for everybody.

India’s coffee retail market is estimated to be standing at Rs1100 crore (US$200 million) with a compound annual growth rate of 20 per cent.

GB