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.”