Dunkin' Donuts opens first store in Alabama

[storewanderer]

People cutting back on high-carb foods is nothing more that a sorry excuse for Krispy Kreme's poor results.

The bottom line is the company had a business model that just did not work in the real world. The locations were in very visible, high rent spots; likely too high rent for selling a small dollar item like donuts and coffee. The dining areas were the size of some normal fast food restaurants and always nearly deserted; too much wasted space. They typically operated 24 hours a day with service points including dine in and drive through; both take labor to run properly. Could they really afford the labor based on their sales to support both service channels? No.

When the Reno location closed, they blamed high gas prices and an increase in sugar costs for their demise. Part of running a business is being able to "roll" with cost increases. If increases doom you, your model is a failure.

For example, the Reno location had a contract to drive donuts out to a Chevron in Battle Mountain, NV. They also had a few gas stations they delivered to in Winnemucca, NV along with the Albertsons there. Did it really make sense to drive donuts over 200 miles one way each day? I don't know. I don't think so. The wholesale sales model is what doomed these Krispy Kreme locations; it was not feasible from a cost point of view.

The service in the locations wasn't great either, but you don't need much service in a donut shop. There isn't much to try to up-sell and there is no order customization so no special requests to relay between employees.