HOMEGROWN COFFEE chain Pickup Coffee is targeting at least 800 stores nationwide by yearend as it expands its footprint despite rising commodity prices.
“Initially, we wanted to achieve between 750 to 800 stores this year. We’re just being a little more careful now with what’s happening in the Middle East,” Pickup Coffee Philippines President and Country Chief Executive Officer Rami Chahwan told reporters on the sidelines of an event late Tuesday.
“We used to open at a rate of 20 to 25 locations a month. Now, we’re scaling down to probably 15 to 20. But we’re introducing franchising, so that number might go above [our target,]” he added.
Pickup Coffee currently operates 530 branches nationwide. The company is also looking to double its store count in Mexico to 100 by yearend, Mr. Chahwan said.
He said franchised stores are not included in the company’s 800-store target.
“We would like to keep it below 20% to 25% franchise-owned stores,” he said. “Our North Star is making sure that the franchisees are profitable, financially viable.”
Mr. Chahwan said demand for coffee has remained stable despite higher commodity prices linked to the ongoing conflict in the Middle East.
“[As a consumer,] I still want to reward myself with what is fairly affordable, and it is that last cup of coffee. It’s kind of a self-reward, and it is functional at the same time as it allows you to stay awake,” he said.
Capital expenditure for a Pickup Coffee franchise is about P2 million, including the construction of the coffee cart and initial beverage inventory, Pickup Coffee Global Managing Director Francis E. Flores said.
Smaller kiosks measuring 12 to 20 square meters (sq.m.) cost about P1.7 million, while café-format stores spanning around 50 to 80 sq.m. require P3 million to P4 million in capital expenditure, he added.
The company said it does not plan to raise beverage prices, noting that it is less exposed to liquefied petroleum gas-related cost pressures than some food and beverage companies.
Pickup Coffee said franchisees receive support across the supply chain, operations, training, and business processes.
The company also projects a payback period of 18 to 24 months for franchise operators, Pickup Coffee Franchising Head Hazel Hernandez-Francisco said. — Beatriz Marie D. Cruz
