food service

Dunkin’ Donuts adds jazz to get less pit and more stop: retail

BLOOMBERG NEWS FILE PHOTO/EMILE WAMSTEKER
DUNKIN' DONUTS is rolling out new store designs to combat its sugar-caffeine fix pit stop reputation and get customers to stick around the outlets for a long time, a la Starbucks.
Posted 6/7/13

CANTON, Mass. - The world’s largest donut chain has long sold itself as a pit stop.

“America runs on Dunkin’,” goes the company’s slogan, and its customers typically stop in for a pre-work sugar-and-caffeine jolt and then split.

Now, in an effort to get customers to stick around and visit after the morning rush, Dunkin’ Brands Group Inc. has set in motion one of the most radical store redesigns since the chain’s 1950 founding. With its earth tones and jazz soundtrack, the new look echoes Starbucks Corp., which has long provided a place for people to hang, sip coffee and surf the Web.

Until recently, the attitude at Dunkin’ was that “life finished” at 11 a.m., CEO Nigel Travis, 63, said in an interview at the company’s headquarters in Canton, Mass. “We’ve attacked that mindset” with the new store designs because Dunkin’ has been losing out on the afternoon consumer, said the U.K.-born executive.

“We haven’t always been conducive to that relaxed environment,” he said. “So soft seating, the ability to watch TV, to listen to appropriate music and just do things slightly slower than you would in the morning is what we think we’ve been missing.”

Dunkin’ is joining an industry-wide rush to upgrade restaurants as quick-service joints jostle with boutique coffee shops and such fast-casual chains as Panera Bread Co.

Wendy’s Co. is overhauling stores with flat-panel TVs, fireplaces and cushioned seating. Seattle-based Starbucks’ capital expenditures will be about $1.2 billion, of which about two-thirds will go to refurbish and improve cafes and build new stores, in its fiscal 2013, compared with $856.2 million the year before. The coffee seller has said it will renovate about 1,400 U.S. locations in the year ending in September.

Snack-shop growth

Dunkin’, which plans to double the number of stores to 15,000 as it pushes west across the United States, is also looking to retain its position in the fast-growing coffee and snack-shop category. Sales at U.S. coffee shops rose 8 percent last year, while those of limited-service burger eateries increased 5 percent and full-service restaurant revenue advanced 4.5 percent, according to Chicago-based researcher Technomic Inc.

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