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Tim Hortons, Starbucks set for a faceoff

In a lane off the popular Linking Road in Bandra, Mumbai, Canada’s largest coffee chain Tim Hortons has set up its first Mumbai outlet, after launching 15 stores in the Delhi-NCR region over the last six-eight months as well as outlets in cities like Chansdigarh and Ludhiana.

The catch? The Mumbai outlet of Tim Hortons is vying for customers on the same street as its nearest competitor, Starbucks.

India’s Rs 5,000-crore coffee retail market is set for an interesting battle as two of the world’s biggest coffee retail chains — Tim Hortons and Starbucks — come face to face.

Tim Hortons India CEO Tarun Jain says the company is targeting 120 stores in the next three years and on its radar are metros, mini metros and satellite cities.

The company has earmarked an investment of Rs 300 crore to expand its footprint in the country and could even exceed its 120-store number as the market evolves, retail industry sources said.

“The out-of-home market is booming after Covid-19 restrictions were lifted last year. And we are seeing this uptick in our stores,” Jain said of the response to Tim Hortons so far in India. The brand first entered India in August last year in Delhi-NCR.

“We are launching two stores in Mumbai, one in Bandra and the other in Lokhandwala, Andheri this weekend (May 27 and May 28). We will also intend to get into neighbouring cities such as Pune, Navi Mumbai, Thane and states such as Gujarat as we move ahead in the west,” Jain, who was earlier with Costa Coffee, part of Devyani International, said.

Tim Hortons will also set foot in Bengaluru in the coming months and has identified properties. “We are looking at all retail channels, whether it is high streets, malls, airports etc for launch of our stores,” Jain said.

The average ticket size, according to retail experts, for a coffee plus food item at Tim Hortons is around Rs 300-400 per person, which is competitive. Tim Hortons also has a wide assortment of food and beverages keeping in mind the taste of Indian consumers, Jain said.

Starbucks has also revamped its menu recently, offering bite-sized food and picco-sized beverages or drinks in smaller portions to drive sales, company officials said. It also has offers starting from 160 for foods and185 for beverages to reach out to more consumers.

It has increased its Indian offerings on its menu including masala chai, elaichi chai and milkshakes apart from coffee and other beverages. It is also offering freshly assembled food at its outlets in addition to refurbishing some 50 stores in select geographies.

These initiatives had received a favourable response as part of a pilot programme, said Sunil D’Souza, MD and CEO, Tata Consumer Products, which runs Tata Starbucks, after the company’s Q4 results, and the plan would be to roll it out aggressively across the country in the future.

Last month, Tata Starbucks, which is part of Tata Consumer Products, said that it had crossed Rs 1,000 crore in turnover in FY23, setting up its highest number of new stores at 71 and entering 15 new cities during the year. It now has a total of 333 cafes in 41 cities, with new store launches planned in FY24.

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