A Fresh Brew: Trent set to serve up Caffe Nero at Westside, Zudio outlets

Retailers globally have added cafes to shopping destinations, to give customers reasons to visit, spend time in stores

Mumbai: Tata Group retailer Trent signed a licensing agreement with British coffee chain Caffe Nero to open cafes within its Westside and Zudio stores, people familiar with the matter said, even though the group has an existing joint venture with Starbucks.

The agreement follows the breakdown of discussions over a similar arrangement between Trent and Tata Starbucks - the joint venture between Tata Consumer Products and US-based Starbucks Coffee Co, the people said. The two sides could not agree on nature of the stores and locations in which Starbucks would operate within Trent's retail network.


Starbucks wanted a prominent, front-facing presence within Trent's stores, while the retailer was unwilling to accommodate such an arrangement, the people said. Differences over the extent of Starbucks' control over store formats and locations also contributed to the breakdown.

Harish Bhat, a Tata veteran associated with the development of Starbucks in India, recently stepped down from Trent's board to avoid any potential conflict of interest, the people said.

The commercial terms of the Caffe Nero agreement, the rollout schedule and the number of cafes planned could not be immediately ascertained. Trent and Caffe Nero did not comment.

Retailers globally have increasingly added cafes and food offerings to shopping destinations, seeking to give customers more reasons to visit and spend time in physical stores. Coffee can complement shopping trips while offering retailers an additional way to differentiate their stores from online competitors.

Coffee chains such as Starbucks have benefited globally from takeaway-led consumption, which can generate sales without requiring customers to occupy cafe seating for extended periods. In India, however, officegoers and students often use cafes as places to relax, work or socialise, spending hours over coffee and snacks.

High real estate costs make the economics of cafe space particularly important in India, where retailers need to maximise revenue per square foot.

For Trent, the partnership provides access to a specialist coffee brand without having to develop its own cafe business. Westside, its fashion and lifestyle chain, and Zudio, the value-fashion format, offer Nero a potential route to reach shoppers through an established retail network.

Caffe Nero was founded in London in 1997 and expanded internationally with its European-style coffeehouse format. The privately held group operates in several countries, including the UK, the US and parts of Europe and the Middle East.

The Trent agreement could provide a platform for a large presence in India, although the scale and pace of expansion remain unclear.