Dunkin' Donuts Opening 46 Restaurants in Northern California

[Alpha8472]

Dunkin' Donuts is going to open 46 restaurants in the Sacramento, California area. California is a huge state and so far there is only a Dunkin' Donuts at Camp Pendleton Marine Corps Base in Oceanside, California. It is not open to the public.

There really are no big chain donut shops in California except for Krispy Kreme and there are only a small number of those Krispy Kreme locations.

Dunkin' Donuts has made agreements for 150 new restaurants in California.

http://www.restaurantnews.com/dunkin-do ... onuts-llc/

[Brian Lutz]

Is this a situation where there used to be previous locations in an area that subsequently closed? I know that Dunkin Donuts used to be fairly common in the Seattle metro area up until about 1997 or so, at which point they all disappeared rather quickly. I have seen other restaurants come back later after previously abandoning an area (Little Caesar's would probably be the most recent example here.)

[Alpha8472]

Supposedly, there were 15 Dunkin' Donuts locations in California in the 80s. Those did not do well and were closed after several years. There were 2 test locations for Dunkin' Donuts several years ago, but those closed after only a short period of time.

Donuts are not very popular in California. Krispy Kreme tried to open up stores in the late 90s and most of them closed after several years. Starbucks, Peet's Coffee, and other smaller chains are where most people get their coffee and Dunkin' Donuts simply could not compete with the coffee competition. Most people in California have to go to local donut shops or supermarkets if they want donuts.

[KingU8ol0Soopers]

This seems rather strange that they would be planning a semi-large expansion when they didn't do well on previous attempts. It seems like chains like Dunkin' Donuts would be getting smaller as Americans are beginning to shift towards "healthier" eating options when eating out.

[Brian Lutz]

I do recall there being one Dunkin Donuts in the Portland metro area a few years ago, but it seems to be gone now.

I doubt that Dunkin Donuts would be making a return to the Northwest anytime soon. Krispy Kreme has fared somewhat better here than in a lot of other places, although they still only have a handful of shops. On the other hand, perhaps the bigger obstacle they would run into up here would be Top Pot, which has been expanding aggressively in the local area and has begun branching out to other areas (plans to open a location in Dallas was announced recently, their first outside the Seattle area.)

[Super S]

I do recall there being one Dunkin Donuts in the Portland metro area a few years ago, but it seems to be gone now.

I doubt that Dunkin Donuts would be making a return to the Northwest anytime soon. Krispy Kreme has fared somewhat better here than in a lot of other places, although they still only have a handful of shops. On the other hand, perhaps the bigger obstacle they would run into up here would be Top Pot, which has been expanding aggressively in the local area and has begun branching out to other areas (plans to open a location in Dallas was announced recently, their first outside the Seattle area.)

I remember two Dunkin Donuts as recently as 7-8 years ago in the Portland area. There was one somewhere near the Burlingame Fred Meyer, and one out in Gresham in a standalone building in front of Kmart.

Winchell's has also gone away, many of those locations are now Heavenly Donuts.

Krispy Kreme is in many ways a novelty which has worn off. They experienced huge crowds when they first came to the Portland area. People made a big deal of their donuts to the point that, in some towns, people would drive an hour to Krispy Kreme locations and bring back a van load of donuts to sell as fundraisers. This went on in Longview, WA for a number of years. In the end, they are a pretty ordinary donut shop.

[BillyGr]

Krispy Kreme has fared somewhat better here than in a lot of other places, although they still only have a handful of shops.

Krispy Kreme is in many ways a novelty which has worn off. They experienced huge crowds when they first came to the Portland area. People made a big deal of their donuts to the point that, in some towns, people would drive an hour to Krispy Kreme locations and bring back a van load of donuts to sell as fundraisers. This went on in Longview, WA for a number of years. In the end, they are a pretty ordinary donut shop.

Those are both their standard operations method.

They tend to have a very small number of stores, which are set up to produce far more donuts than they can sell at the store itself (except maybe for the first few months when everyone is trying them out).

They then set up and sell those donuts through other retailers (grocery, convenience etc.) as well as offering them to groups as a fundraising option.

So, they are (or at least have been) really more of a donut making company than a donut retailer, more similar to any of the brands you'd find in the supermarket.

The only exception is in some of their "long time" markets in the South, where I believe they tend to have more of their own stores.

But, even then, the first store started as a manufacturing plant, and only when people kept stopping by to buy donuts did they add the retail portion.


Dunkin, on the other hand, has always been a donut retailer - after all each shop used to make it's own donuts (though now most are made in regional factory stores and trucked to the individual shops - this does allow them to put locations in places where they couldn't have in the past, like gas stations where there wouldn't be room for production).

Not to mention that, in areas where Dunkin is more familiar (like here in NY) there are often stores within a couple miles of each other.

[Brian Lutz]

I have seen Krispy Kremes appear intermittently at various supermarkets here, but I'm not aware of any that still have them. Aside from their own shops you mostly see them at gas stations and convenience stores now. To be honest, I have a hard time eating them these days, I used to work a few blocks from the one in Issaquah and it seems like pepole brought them into the office all the time, which was plenty of opportunity to get thoroughly sick of them.

Top Pot actually does a pretty decent amount of supermarket business these days as the "house donut" for QFC stores throughout the area.

[storewanderer]

Ralphs and Starbucks both feature Top Pot donuts as well. I think these are a better product than Krispy Kreme and FAR better than Dunkin (not a very good donut product at all; but good coffee and tea products).

Dunkin announced it would enter northern Nevada 3 years ago but had trouble finding a franchisee. They eventually found someone and they will reportedly be opening their first stores here next year.

I do believe there is a place for Dunkin in some of these western markets in poorer neighborhoods that Starbucks has avoided. It won't be glamorous and probably won't get them a very good reputation but I think it will be the only way for them to be profitable in these markets out west. As you guys have noted there have already been multiple prior failures. I had no idea Dunkin was in OR/WA. I knew about the CA failures.

I think a cobrand of Dunkin and Subway may work... wouldn't be hard to add Dunkin's coffee equipment and their pre made poor quality pastry items into a Subway... and would not cost Subway much to operate beyond the initial equipment cost.

[Alpha8472]

I think that Dunkin Donuts is indeed low quality compared to Top Pot and Starbucks. Dunkin Donuts stopped making donuts in most of their stores. The donuts are made in only a few locations and then are shipped to other stores. This makes their donuts stale. California is spoiled in that we have high quality coffee such as Starbucks and Peet's. Peet's is virtually unheard of on the East Coast where Dunkin Donuts is prevalent.

Dunkin Donuts does not have a nostalgic value to Californians or to other West Coast states. Subway would probably be brought down if they started serving Dunkin Donuts. Subway is all about pretending that their food is healthy. Of course we all know that Subway food is high in salt, preservatives, and is often just as unhealthy as other fast food chains.

Dunkin Donuts is something that Walmart might think of doing. They already have McDonald's in most of their older stores. Adding Dunkin Donuts will appeal to the shoppers of Walmart who don't seem to care about healthy eating. I'm sure Dunkin would do tons of business inside of Walmart stores.