Dunkin’ retreats from gas stations
Dunkin’ is pulling away from being an add-on experience for people buying gas as it continues to redirect its focus towards its standalone “NextGen” stores.
The chain is on track to end its co-location relationships in 450 Speedway gas stations by the end of 2020, according to Delish, a move that has been anticipated since February when the chain first announced it on an earnings call. At that time, Scott Murphy, president of Dunkin’ Americas, represented the move as a strategic pivot, stating that those areas that no longer had combination Dunkin’/Speedway locations would be better served with “future Dunkin’ restaurants that reflect the full expression of [Dunkin’s] next-generation restaurant design.” The Speedway/Dunkin’ locations tend to have fewer menu items than the mainline stores and, in 2019, represented only 0.5 percent of Dunkin’s U.S. sales.
The shift away from hybrid gas station locations is the latest in a series of moves Dunkin’ has pursued as it tries to reinvent itself as a more contemporary brand capable of competing with coffee category leaders like Starbucks. With the arrival of company president (and later CEO) David Hoffmann in 2016, the chain began pursuing a rebranding. This led to an expanded food and drink menu and, in 2018, the launch of a new concept store with technological enhancements such as digital kiosks and a dedicated drive-thru for app-based orders. The chain also officially dropped “Donuts” from its name.
Dunkin’ continues to experiment with a more varied product selection. Recently the chain has been testing Bubble Tea and Bubble Iced Coffee in some locations in Massachusetts, the chain’s home state, according to Fansided. Bubble Tea, which contains tapioca “bubbles,” enjoys broad popularity in parts of Asia and has developed a niche fan base in the U.S.
Dunkin’, like most if not all U.S. QSRs, has faced ongoing difficulties due to the novel coronavirus pandemic. The chain experienced sales declines of 20 percent in late-March and 35 percent in April according to Boston.com, after what had been an auspicious start to 2020 in January, February and early March.
- Dunkin’ Is Closing 450 Of Its Locations Inside Of Speedway Gas Stations – Delish
- What’s Dunkin’ without ‘donuts’ in its name – RetailWire
- Dunkin’ is testing a variety of new drinks this summer, including Bubble Teas – Fansided
- The year started off well for Dunkin’. Then the pandemic hit. – Boston.com
DISCUSSION QUESTIONS: Is it wise for Dunkin’ to get out of the gas station game as it continues rebranding and refocusing on standalone NextGen stores? Do pandemic era factors play into how quickly or cautiously Dunkin’ should pursue this move?