Industry News | February 10, 2012

Dunkin' Wants 80% of Sales to Come from Outside Northeast

Coming off a fourth quarter that saw a steep rise in global sales, Dunkin' Brands is laying the groundwork for additional U.S. unit growth, including toward the West Coast.

Global system-wide sales grew approximately 15 percent in Q4 of 2011, or 8.1 percent on a 13-week basis, said Neil Moses, CFO of Dunkin' Brands, during the company's fourth-quarter earnings call yesterday. Global sales increased 7.8 percent on a 13-week basis, largely driven by the brand's U.S. sales growth, he said.

Nigel Travis, CEO of Dunkin' Brands, said during the call that the success validates the brand’s expansion push.

"As time goes on, we'll gradually open less stores in our core developing areas, and we'll open more in the less-developed, less-penetrated areas in the Southeast, the Midwest, [and] West,” Travis said.

"I'll repeat what we've said before: We can still open 3,000 stores, even on the Pacific [Coast].”

Travis said he receives daily inquiries from franchisees that want to know, "Where can I go and develop?"

"That's a high-class problem that will drive us further and further away from the core, because the core is just about built out," he said, adding that the goal for Dunkin' Donuts is to see 80 percent of sales generated from outside the company's core market in the Northeastern U.S.

John Dawson, chief development officer at Dunkin' Brands, said he was encouraged by recent sales figures, which he said illustrated that sales growth for Dunkin' Donuts outside the Northeastern U.S. region "actually exceeded the core Northeast." "We often get a question about the ability to expand the Dunkin' premise beyond our core markets, and this stronger comp sales performance, I think, illustrates the ability of our franchisees to grow the business,” Dawson told investors. “Comps did increase outside the Northeast and were broadly based."

Travis said breakfast and bakery sandwiches at Dunkin’ Donuts have been successful, and that the company will continue its focus on the sandwich station as a revenue driver. Franchisees had "zero problems" with the recent roll out of a Dunkin' Donuts K-Cup promotion, he said.

By Jan Fletcher

Moses reported a net decline of 35 U.S. Baskin-Robbins stores in the fourth quarter, for a total net decline of 90 stores in 2011. The company closed under-performing Baskin-Robbins stores, he said.

News and information presented in this release has not been corroborated by QSR, Food News Media, or Journalistic, Inc.