CANTON, Mass. -- The CEO of Dunkin' Brands, parent company of Dunkin' Donuts, called out convenience stores as a primary reason the company’s restaurant chains are struggling with afternoon traffic.
During a presentation by Dunkin’ executives at the Jefferies 2017 Global Consumer Conference, CEO Nigel Travis talked about the competitive challenges that the company is currently facing. He remarked that convenience stores have emerged as a serious competitor against Dunkin' as retailers have been forced to shift focus from cigarette, e-cigarette and fuel sales to higher-margin food and coffee programs.
To head off the ever-increasing competition from c-stores, Travis said that Dunkin' will heavily promote its On-the-Go app. The company reported that consumer research from last summer has shown that customers prefer to use Dunkin' as a quick, convenient option.
“I think once we get people to try it, they realize that this is true convenience. And this is a really strong competitive weapon against be it McDonald’s [or] convenience stores, because people want speed and convenience,” Travis said. Dunkin’ announced that it will also test delivery and curbside pickup services to underscore convenience.
Travis also identified leading QSRs, such as McDonald's and Burger King, as competitive threats to Dunkin’s afternoon sales. Dunkin' described its brand as revolving around being a beverage on-the-go destination, which encourages customers to buy their products during morning rush hours. However, according to the company, customers tend to not come back later in the day.
In contrast, McDonald’s, in particular, has shifted in the last two years to selling breakfast food all day, drawing an around-the-clock audience and challenging Dunkin’s all-day breakfast food staples such as doughnuts. Dunkin' also cited McDonald’s and Burger King’s low coffee prices, which are comparable to Dunkin', which is based in Canton, Mass.
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