Dunkin Donuts

Dunkin’ announced today a sizable expansion for 50 new locations outside the Northeast, the chain’s home region and where it’s historically held stores. The expansions will include elements of the chain’s next-generation store, which caters to mobile ordering, more modern design, and more espresso drinks.

In a press release, Dunkin’ said the new locations are part of an ongoing plan to open 200 to 250 new restaurants each year over the next three years. For this round, the company will head to Texas, Michigan, Southern Kentucky, Minnesota, Wisconsin, North Carolina, Nevada, and Missouri.

Notably, many of the planned expansions are with longtime franchisee groups. Even more notable is that with these deals, Dunkin’ will offer “flexible concepts for any real estate format,” according to the press release. Given that one-size-fits-all store redesign formats has been a point of friction for other restaurants (hello, McDonald’s), this flexibility could be a more rewarding way to go about expanding and redesigning.

Dunkin’s already made it clear to the world it’s trying to compete with other coffee-beverage brands (Starbucks, McDonald’s) with its next-gen concept store, which it launched at the beginning of 2018 in its hometown of Quincy, MA. The store, which has since made its way to other areas in the North, offers dedicated drive-thru lanes for mobile orders, on-tap (coffee) beverages, and delivery options with third-party companies like Grubhub.

Grant Benson, CFE, senior vice president of franchising and business development, indicated in the press release that new locations will offer those features, and that Dunkin plans to “capitalize on the momentum we experienced in 2018.”

That momentum is evident: same-store sales at Dunkin’ were up 2.4 percent in the first quarter of 2019, and CEO David Hoffman said this was the largest quarterly same-store sales gain in four years. He also noted it was the result of “technology advancements” (and espresso drinks).

Dunkin’ isn’t a totally foreign presence outside the Northeast; outposts like Dunkin’ Express are becoming more and more common at places like highway truck stops. But those are basically drip coffee and donut stations within an existing convenience store, and would only go so far when competing with the likes of Starbucks or McDonald’s. Expanding not just full-service locations but features of its next-generation concept would help give Dunkin’ a greater presence coast to coast, something it’s going to need if it wants to stay relevant.

What would really up the competition would be for Dunkin’ to adopt an AI strategy like the one McDonald’s just did when it acquired Dynamic Yield. While there’s no indication that such a deal is in the works, or even if AI is going to be that much of a competitive differentiator, it doesn’t seem out of the realm of possibilities as Dunkin’s next move.

Leave a Reply