Dunkin’ brewin’ up ‘on-the-go’ service
If Americans do indeed run on Dunkin’ Donuts, the company wants to serve more of them midstride. Dunkin’ Brands chief executive Nigel Travis said Thursday that the Canton-based chain will pare both its menu and expansion plans in an attempt to better establish Dunkin’ Donuts as an “on-the-go” brand.
The changes will soon be reflected in updated store designs that will focus on serving customers who place orders on mobile devices and pick them up in Dunkin’ shops, Travis said. It also will put more emphasis on drive-throughs and curbside pickup.
The overall goal is to increase store traffic, which last quarter dipped in comparison with the same period last year. In a phone interview following an earnings call Thursday, Travis said that the push toward faster service was a response to customer demand. “The consumer is looking for more convenience,” he said. “And on-the-go ordering is the ultimate in convenience.”
Travis said 70 percent of Dunkin’ customers who use mobile ordering within the chain’s DD Perks app are repeat customers. Those orders now account for 2 percent of all store sales.
He said that the company had already begun to retrofit stores to accommodate online orders, but that it quickly saw the need for a more thoughtful redesign.
“We introduced a pink pickup mat in some stores a year ago, and at certain stores we found it wasn’t big enough” to handle the number of orders, he said. He said the company is considering creating a cubby-like system that would help organize pickups and avoid congestion as customers came to retrieve their preordered drinks.
Jon Hurst, president of the Retailers Association of Massachusetts, said the company’s focus on on-the-go service is a reflection of the marketplace.
“There are unlimited coffee options today and the customer is looking for convenience and consistency,” he said.
As part of an effort to stress beverage sales, Dunkin’ also is simplifying the menu at 1,000 locations, including some New England stores. Starting next month, it will remove some menu items in markets that include Bristol County and Providence.Travis said the smaller menus are intended, in part, to help franchisees cut down on the time it takes to train employees, and reduce turnover among staffers who felt overwhelmed by work involved in preparing a larger menu. He has previously said that the average turnover rate in the industry is more than 150 percent a year.
Items that could be eliminated in some stores include all afternoon sandwiches, honey bran raisin and reduced-fat muffins, and some types of bagels — including garlic, blueberry, onion, salt, and whole wheat. Drinks on the chopping block include flavor shots and smoothies. Cookies, brownies, and “bagel twists” may also be eliminated.
All of this, said company spokeswoman Michelle King in a statement, is intended to “enhance speed of service and in-store operations.”
“We have conducted extensive consumer research and our customers have told us that our menu was too complex and confusing,” she said.
But fear not, bagel twist lovers — King said there will be no changes to any menus at Dunkin’ locations “in the Boston market.”
There are more than 1,100 Dunkin’ Donuts shops in Massachusetts, and more than 8,900 nationwide. Testing of the simplified menus will start in the Providence area on Aug. 7.
Based on the reaction from social media, Dunkin’ Donuts may face a marketing challenge.
One Facebook post — showing menu items that apparently will be dropped from a Dunkin’ location in Somerset — has been shared more than 2,800 times.
“Pretty much everything I order from Dunkin’ is getting taken off the menu,” said Lyndsay DiManno, the 25-year-old Somerset cook who posted the list. “I was upset about it.”
The company had previously said it would open 385 new stores this year, but those numbers have now been scaled back to between 330 to 350. Travis said that was due in part to franchisees wanting to wait until new store designs — which are in the works — are rolled out. But it also speaks to the fact that Dunkin’ has been feeling the heat from other operators in the quick-service market, including McDonald’s, which has been edging into Dunkin’s territory with its $1 beverage offerings. Earlier this week, McDonald’s said US same-store sales were up 3.9 percent during the last quarter.
“We’re focused much more on the size and quality of the new stores we open rather than the sheer number of units,” Travis said.
The industry publication Nation’s Restaurant News reported last month that Dunkin’ Donuts recorded $8.2 billion in sales last year, up 8 percent from 2015. It now ranks as the seventh-largest restaurant chain in the United States.