Dunkin’ Donuts, the popular Massachusetts-based chain with more than 8,000 locations in the U.S., announced in will soon be closing 100 stores.
Consumers accustomed to racing into Speedway stores to fuel up on gas while getting their daily Dunkin’ Donuts fix may have to change their routines. Dunkin’ Brands, the company that owns Dunkin’ Donuts and Baskin-Robbins, has announced 100 Dunkin’ Donuts stores in the United States are set to close this year and next.
While the company hasn’t provided a list of stores impacted, it has said they are all owned by the Speedway gas station and convenience store chain. The reasons behind the franchisee’s decision to shutter the locations remains unclear as Dunkin’ Brands insists poor performance has not factored into the decision.
Dunkin’ Brands still has plans to open stores in California and internationally soon, the company insists. It also points out the Speedway locations represent only a small fraction of its business and overall revenue.
Dunkin’ Donuts Footprint will Remain Large
The Speedway closings are likely to be felt by those who enjoyed the convenience offered by the combination stores. Even so, the closing of 100 locations is a drop in the bucket for the company’s overall footprint. Dunkin’ has more than 11,300 stores worldwide with more than 8,000 found within the United States, the company’s website states.
All told, the Quincy, Mass.-based chain boasts about 3 million customers a day. With additional expansion planned in California and abroad, the loss of the Speedway locations shouldn’t create a big impact on the company’s overall numbers.
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Growing Competition, Lackluster Performance
The Speedway closings might not significantly change Dunkin’s footprint, but the company has been struggling to maintain performance. With plenty of competition in the field courtesy of players like Starbucks, McDonald’s, Krispy Kreme and other big-name chains, Dunkin’ Donuts issued earnings guidance for the year that fell short of Wall Street’s estimates. It also lowered its outlook for the third quarter to 1.1% same-store sales growth as competition pulls customers away from its doors.
Investors are noticing the struggle and they are reacting. News of the Speedway closings caused shares to drop by more than 12%.
Whether America still runs on Dunkin’ remains to be seen. Some analysts worry that growing competition and costly promotional gimmicks – such as free coffee on National Coffee Day – combined with rising labor costs could spell more bad news down the road.
