Dunkin’ Vies for California — Again

For the third time in 30 years Dunkin’ Donuts is attempting to bring its coffee drinks and baked goods to California with its forthcoming West Coast expansion.

April 15, 2013

NEW YORK – Dunkin’ Donuts has learned over the years that success in California may be a challenging prospect, but it’s not one to back down from.

Bloomberg reported last week that Dunkin’ Donuts, with just one location in California, announced plans to open new locations “up and down the West Coast, starting with 150 stores in southern California.” The expansion also includes 12 states without a Dunkin’ Donuts: Alaska, Hawaii, Idaho, Minnesota, Montana, Nebraska, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. Currently, about 85% of Dunkin’s U.S. locations are in Northeast states, and in the past 50 years it’s opened locations in 31 countries.

Dunkin’ had about 12 locations in California but pulled out in the late 1990s, notes the news source, and in 2002 the company tried to re-enter Sacramento with no success. “For one reason or another, usually down to the partner, it didn’t work out,” said Dunkin’ CEO Nigel Travis, citing inadequate franchisee support and “world-class bad” training.

Travis also cited real estate challenges in the California market, telling the news source that the state “has some strong competitors.” He said that he hopes the new restaurants will pick up business from East Coast transplants who are familiar with the brand, people “sick of bad supermarket coffee” and customers of independent coffee houses and competing chains.

Bloomberg writes that the key to Dunkin’s success is not actually its donuts. The coffee and breakfast sandwiches — the “more ritualistic” products” — accounted for about 58% of its U.S. franchisee-reported sales in 2012. The company also states in its 10-K filing that it’s “positioned to capture additional coffee market share through an increased focus on coffee offerings.”

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