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1 COMPANY ANALYSIS 11 Background In 1971 Italian brothers Sergio and Bruno Costa started a wholesale operation supplying roasted coffee to caterers and specialist Italian coffee shops Within a few years they were so famous for combining their roasting business with premium coffee shops that Costa Coffee quickly became a dominant name on the UKs high streets The Costa brothers opened the first Costa store in London in 1978 and growth expanded at the rate of two stores per year with the help of their family and friends in the business In October 1995 food and drinks giant Whitbread PLC acquired Costa and immediately established the brand as the market leader in the premium coffee shop sector Developments such as the new roaster were crucial to Costa With huge growth over the 1990s the company had increased to 186 stores by 1999 and in 2000 37 million cups of coffee were sold each week source httpwwwstannahcouk Costa is now the leading UK branded coffee shop with over 300 stores source wwwcostacouk 12 Financial situation Pre-tax profits for Costa Ltd improved from 1m in 2001 to 9m in 2002 Between 2001 and 2002 the pre-tax profit increased by almost 553 probably due to an increase of the economy of scale Indeed Costa opened several outlets during this year Turnover for the company rose by 191 with 5m A typical Costa outlet has a turnover of between 000 and 000 per week excluding VAT 13 Target Market Selection There are so many different variants of coffee shops that there is something for everyone Consequently it is difficult to define the target market for speciality branded coffee shops since by their nature they have a very wide and disparate target market Moreover it is mainly influenced by the location of the coffee shop outlet However the main target market of Costa could be working people aged between 20-45 years old They
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