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After wrapping up its coffee retail business under Gloria Jeans Coffee, Citymax Hospitality is focussing on doughnut retailing by expanding its Krispy Kreme outlets.
Part of the Dubai-based Landmark Group, which also owns Lifestyle International, Citymax has already opened 11 outlets in Bangalore in the past one year.
The company, which is the master franchise for Krispy Kreme doughnut in the south and the west, plans to extend its business through cafes and factory stores.
“Indians have a sweet tooth, and doughnuts have more traction than coffee in this country. While we are no longer scaling up our Gloria Jeans outlets, Krispy Kreme will be extended through two formats across the south and west with 25 stores this year,” said Kabir Lumba, Managing Director, Lifestyle International.
The US-based brand is in the process of setting up new standalone and mall-based stores. “We are also looking at an online model, whereby deliveries will be made across our food menu, which includes soft drinks, tea, coffee and donoughts,” added Lumba. The Lifestyle stores could also be used as vending points for the doughnut brand.
Considering that real estate costs are the biggest impediment to profitability, Citymax has decided to stay away from launching its outlets in expensive areas such as Colaba Causeway in South Mumbai, where it once had its Gloria Jeans Coffee store.
“We have launched our first factory outlet in Powai in north Mumbai, but it is unlikely that we would open stores in Colaba.
While real estate costs are the same across retail formats, we hope to sell more donuts than coffee, which should compensate for the high rentals in the big cities,” added Lumba.
Krispy Kreme is an 80-year old brand whose largest market is the US. In India, it faces competition from other US brands like Dunkin Donuts and Singaporean brand Mad Over Donuts.
“We are on time in the Indian market. There is no time frame about breaking even. Krispy Kreme will sell on the strength of its brand name, and we plan to have between 80-100 stores in the next five years,” added Lumba.
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