May 13, 2004

WM Donut Wars Anyone?: *Yet Another Update*

It appears that someone at Wal-Mart (WM) headquarters has managed to start what could easily turn into a major mess between competitors Dunkin Donuts and Krispy Kreme Donuts Inc., each of whom are setting up shop(s) inside certain WM stores.

CNN/Money reports that Dunkin' Donuts Set to Open 10 Shops in Wal-Mart Stores

Dunkin' Donuts said it agreed to open 10 shops inside Wal-Mart stores in the next three months, adding to the retailer's growing roster of restaurants in its stores, Thursday's Wall Street Journal reported.

The deal could offer a major boost to Dunkin' Donuts' goal of stretching beyond its Northeast stronghold to have a national market. If the initial test is successful, Dunkin' Donuts, one of the biggest coffee retailers in the U.S., says it hopes to expand to additional Wal-Mart outlets.

However, Dunkin' Donuts, which is part of British spirits company Allied Domecq PLC (AED), could come up against Krispy Kreme Donuts Inc. Wal-Mart Stores Inc. (WMT) already has an agreement with Krispy Kreme to test two of its outlets inside Wal-Mart stores, with a plan to open five more this quarter. Furthermore, Wal-Mart, which has about 3,000 U.S. stores, already sells boxed Krispy Kreme donuts in the main area of more than 500 of its stores.

Wall Street Journal Staff Reporter Deborah Ball contributed to this report.

It will be quite interesting to watch this particular WM sponsored food fight as it evolves.


In addition, via Business Wire -- which came my way via a Google News Alert re: Wal-Mart, is this recent Dunkin Donuts press release:

Dunkin' Donuts to Establish Retail Presence in Select Wal-Mart Stores; Famous Brand Names Join Forces to Open Store-within-a-Store Concept

RANDOLPH, Mass.--(BUSINESS WIRE)--May 13, 2004--Wal-Mart and Dunkin' Donuts, the world's largest coffee-and-baked goods chain, announced today the opening of the first Dunkin' Donuts shop within a Wal-Mart store. The store-within-a-Wal-Mart concept will celebrate its grand opening Friday, May 14, in North Wyndham, Connecticut. The brands announced plans to open ten stores in the next three months in Wal-Mart locations in Connecticut, Massachusetts, New York, Ohio, Pennsylvania, and Vermont.


Prominently positioned in the front of each Wal-Mart, the in-store Dunkin' Donuts shops will look and feel just like a neighborhood Dunkin' Donuts store. Each shop will offer a full menu, complete with Dunkin' Donuts' legendary hot coffee, recently named Best Coffee in America on NBC's "Today" Show. The menu will also include lattes, cappuccinos, breakfast sandwiches and, of course, donuts. Shoppers and Wal-Mart associates will be able to take a break in a comfortable restaurant environment.

For an added treat, some of the Dunkin' Donuts stores will also feature ice cream from Baskin-Robbins, a sister ADQSR brand. Shoppers will also have the option to pre-pay for certain Dunkin' Donuts and Baskin-Robbins menu items at the Wal-Mart registers, along with the rest of their purchases, and have these items ready for pick up at the in-store Dunkin' Donuts shop to take home or to enjoy in the store.

The Dunkin' Donuts and combined Baskin-Robbins will be owned and operated by franchisees and located in markets where Dunkin' Donuts enjoys a strong retail presence. The next in-store shops will open in Walpole, Massachusetts and Monaca, Pennsylvania within a month.


Hmmm, donuts a la mode anyone?

*Yet Another Update*

Two related items with additional information or news tid bits (donut holes I suppose) and, lastly, a little food for thought.

FoxNews: Business
Dunkin' Donuts to Enter Some Wal-Mart Stores in Blow to Krispy Kreme

Thursday, May 13, 2004

CHICAGO���Dunkin' Donuts Thursday said it will open 10 shops inside Wal-Mart stores, helping the world's largest retailer broaden its branded fast-food offerings.

News of the deal could be a further blow to Dunkin' Donuts' rival Krispy Kreme Doughnuts Inc. (KKD), which has already set up shop inside seven Wal-Mart Stores Inc. (WMT)�locations. Krispy Kreme warned earlier this month that the low-carbohydrate dieting craze would dampen profits, and it cut its expansion plans.


Bentonville, Arkansas-based Wal-Mart has been steadily broadening its offerings of fast food in an effort to provide respite to shoppers navigating its vast, large-format stores.

The retailer also houses some 950 hamburger McDonald's Corp. hamburger stands, and it recently entered a deal to offer 100 sandwich shops run by Blimpie International Inc.

In addition, Wal-Mart has about 1,700 of its own Radio Grill and Wal-Mart snack bars, said Sharon Weber, a company spokeswoman. Wal-Mart limits its restaurant offerings to one format per store, she said.

"We really are looking at different formats and different plans to offer our customers," Weber said, adding that it was too early to determine how many total Dunkin' Donuts were planned. "It is important for us that they can sit and relax."

And, finally, some food for thought?

Motley Fool: Our Take
Slam Dunkin' at Wal-Mart?

*Note*: Added more, including excerpts of a (as well as links to) corporate press release, news article and commentary: last updated on Thursday, May 13, 2004 at 7:17 PM [EDT].

Posted by Morgan on May, 13 2004 at 09:50 AM