Krispy Kreme returns to Dunkin'-dominated New England

Krispy Kreme is returning to Dunkin' Donuts country, opening seven new locations in Maine and New Hampshire after a decade-long hiatus.

John Godbey/The Decatur Daily via AP/File
An assortment of Krispy Kreme doughnuts in Decatur, Alabama (January 19, 2016). The doughnut chain has announced that it is returning to New England.

Krispy Kreme is going back to New England.

The doughnut chain announced Monday that it intends to open four stores in New Hampshire and three in Maine over the next few years.

“The demand for Krispy Kreme doughnuts and coffee continues to grow throughout New England, so we are very happy to bring this iconic brand to New Hampshire and Maine,” Patricia Perry, Krispy Kreme Doughnuts’ Vice President of Global Franchise Development, said in a press release.

This isn’t Krispy Kreme’s first foray into New England. The chain closed its last seven stores in the region in the early 2000s after failing to find a foothold in a market dominated by Dunkin' Donuts, a Boston-born company.

Nathan Yau, a statistician at FlowingData, put together a map of the leading coffee chains in each US city.  The map shows that Dunkin’ Donuts has all-but total control of the East Coast market for coffee and doughnuts, even far more than coffee giant Starbucks. Krispy Kreme, which emphasizes doughnuts first and coffee second, doesn't claim a single city on the map. 

In recent years Krispy Kreme has introduced different coffee blends to accompany its famous glazed doughnuts and has found some success selling K-cup versions of its coffees individually and in stores. But the competition that it faces from Dunkin' Donuts in its efforts to expand are quite stiff. 

Dunkin’ Donuts is a much larger national chain than Krispy Kreme: there are more than 8,000 Dunkin’ restaurants in the states to Krispy Kreme’s 300, and more than 3,2000 international Dunkin’ locations in 36 countries to Krispy Kreme’s 1,000 locations in 25 countries.

Krispy Kreme is a chain with historically Southern roots. It was founded in 1937 in North Carolina, and the recipe for its much-loved signature glazed doughnuts has remained more or less unchanged since its founding.  

Krispy Kreme and Dunkin Donuts’ have also had different recipes for expansion.  Krispy Kreme has chosen to focus on building up its international presence. In the past few years, Dunkin’ Donuts, which struggled to break into the West Coast market in the 1990s, has focused on opening franchises in California, while also focusing on its international base.

Krispy Kreme has struggled in recent years. Krispy Kreme stocks plummeted 12 percent in a single day in September after the chain released a dismal quarterly earnings report. The company does not plan to release its 2015 fourth quarter results until March.

The company has historically relied on promotional activities like one-day discounts to draw in customers, including its ever-popular discounts associated with National Talk Like a Pirate Day. These fad one-day events do work to draw in consumers, but end up hurting sales in the long run because the discounts offered are so steep, Krispy Kreme CEO Tony Thompson said in September.    

In early February, Dunkin Brands, which owns Dunkin’ Donuts, released its earnings report for the fourth quarter of 2015. Despite a slight sales dip at Dunkin’ stores of 0.8 percent nationwide, its international presence continues to grow. The company opened 59 new Dunkin’ Donuts stores internationally in the fourth quarter of 2015.  

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