Some Sweet Financial News


Some Sweet Financial News
| Published March 13, 2014 |

By Thursday Review staff

One occasional complaint we receive here at Thursday Review: too much bad news on the economy and jobs, not to mention all those big bad mergers and all those businesses planning to close stores. One reader in Colorado sent us an email that simply said “Stop with all the layoffs and price increases, will you!”

Well, here is something sweet in the world of business and finance: both Dunkin’ Donuts and Krispy Kreme are showing lots of profits. In fact, we’d say they were swimming in the black ink, but that image might seem creepy considering that what they swim in most days is warm sugar and hot gourmet coffee.

Krispy Kreme was one of the very few restaurants (well, retailers, for those health buffs who consider doughnuts junk food) that saw a big profit spike during the twelve weeks of horrible winter weather just now tapering off into spring. Dunkin’ Donuts also saw a big profit during the Polar Vortex (all four of the vortex events), and its sales spiked to much higher levels than had been predicted by any analysts.

Compared to the same winter period one year before, Krispy Kreme saw a 3.3% sales increase nationally, while their owner-franchise locations got an even bigger boost of over 6%. Dunkin’ Donuts saw its sales for that same period rise by an astounding 13%.

Both companies have seen growth in the last few years, bounding out of the recession in healthier shape (oops, there’s that word again) than most retail and restaurant operations. Dunkin’ Donuts has been expanding rapidly in recent years, adding new locations at a feverish rate. Dunkin opened over 300 new locations in 2013, and about 150 of those were opened in the United States. Both chains also saw a measurable increase in sales of coffee in the last year (see tomorrow's article “How Much Will You Pay for Coffee?” here in these pages), another indication of the growing popularity of flavored coffees and specialized brews despite a now well-publicized worldwide increase in coffee prices.

Both companies offer their own popular brands of specialized coffee and blended joe, over the counter, or for sale in bagged form.

Dunkin’ Donuts profits benefit from the fact that it owns Baskin-Robbins, though it is still hard to explain how ice cream sold in greater quantities during one of the most severe North American winters in nearly 100 years.

Krispy Kreme was founded in 1937 in Winston-Salem, North Carolina. Dunkin’ Donuts was founded in 1950 in Quincy, Massachusetts. According to some business websites we used to research this article, Dunkin Donuts competes less with Krispy Kreme than with Starbucks, since fully half of Dunkin’ Donut’s sales are derived through coffee products.

Related Thursday Review articles:

Doughnuts & Coffee: Krispy Kreme Offers Joe Flavored Doughnuts; Thursday Review; February 20, 2014.

Coffee Prices: The Woes of Joe; R. Alan Clanton; Thursday Review; February 5, 2014.