Five years after launch, HUL shuts down Bru World Cafe chain
Retail in India is not an easy business given the high costs of rentals and overheads besides declining same-store sales growth, say analysts
Mumbai: Hindustan Unilever Ltd (HUL), India’s largest consumer packaged goods company by sales, has decided to shutter its coffee retail chain Bru World Cafés five years after launching it.
“We have decided to close our Bru World Cafés,” a company spokesperson confirmed in an email on Monday, adding that the cafe chain was launched to enable the brand to have a deeper consumer engagement.
“These learnings have helped us to bring more consumer-relevant innovations, which has contributed to the success of Bru as the largest-selling coffee brand in India,” the spokesperson added.
According to the brucoffee.in website, there are seven Bru World Cafés in Mumbai.
In August 2015, HUL launched the Taj Mahal Tea House in Bandra as an experience centre for its tea brand. The company also has a retail model for its beauty business under Lakme Beauty Salons.
To be sure, retail in India is not an easy business given the high costs of rentals and overheads besides declining same-store sales growth due to tough macroeconomic environment, causing consumers to tighten their belts.
Chains such as Pizza Hut, Costa Coffee, KFC, Barista and McDonald’s have all downsized operations in recent months, closing more than 80 outlets in the past 12-18 months, The Economic Times reported in May.
In the past year, Tata Starbucks Pvt. Ltd, a joint venture of Tata Global Beverages Ltd and Starbucks Corp., has opened only 10 new stores, compared to the average 25 stores a year it opened in the first three years after the launch of its first store in October 2012, Mint reported in July.
“The coffee business is not easy; there is a lot of competition from international coffee chains and hence to operate successfully in this space, a company needs to be focused and have a USP,” said Samir Kuckreja, founder and chief executive officer, Tasanya Hospitality Pvt. Ltd, a consulting firm in the food and beverage retail space.