Industry News | August 13, 2008

Cinnabon Sets Sights on Europe

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Snack giant FOCUS Brands is breaking into the European market with a new Cinnabon store in London. The restaurant is the first of 40 stores slated for the country and is located at the city’s Time Square equivalent, Piccadilly Circus, where traffic and visibility will be high for the brand.

Mike Shattuck, senior vice president of international operations for FOCUS Brands, says Europe was the next untapped market for the growing company since it already established operations in the Middle East and Latin America. “Part of our approach to Europe was that the U.K. is a good landing spot for us,” he says. “The U.K. is a premier market. It touches a lot of Europe, there’s a lot of influence coming out of the London area in particular the location we’ve chosen.”

Cinnabon’s newest international location does not come without some challenges, however. Shattuck admits that the store’s footprint is very small and that the company is working to broker a deal that would allow access to the shared space in the building. “We’ve been working with the [neighbors] because they control the common area and are going to give us some seats, which is something that we direly miss right now,” Shattuck says.

The new London store is a ground-floor location with kitchen and preparation areas underneath. Shattuck predicts that the area’s renovation, including the opening of a Ripley’s Believe it or Not, will boost traffic for the store even more.

Despite the increased traffic, Cinnabon will have to compete with Haagen-Daz and Starbucks for part of the snack-segment dollar. And that might be harder than expected since beverage activity has been less than stellar so far. “From a beverage point of view, we’ve been very disappointed with our beverage sales to date, we think we can improve that, and that primarily comes from the cost of coffee and Starbucks,” he says.

As for the rest of the menu, Shattuck says that the store is taking a standard approach in its early stages. It features manly traditional U.S. menu items with the addition of the Choc-o-bun, a bun layered with cocoa instead of cinnamon sugar sold at all international Cinnabon locations. “With a new operation, you need to let it get settled in,” he says. “We’ll absolutely do unique products for calendar events. This is such a cosmopolitan market; there’s a lot of influences from all around the world.”

FOCUS Brands awarded Rayhaan Hassim, principal owner of Cinnaworld Ltd., a master franchise with the brand until 2014. Hassim’s organization also owns bakeries in South Africa under the Cinnabest Retail Ltd. entity.

—Blair Chancey