Krispy Kreme Cancels Wal-Mart Test
By George Anderson
It never issued a formal grade, but Krispy Kreme’s announcement it was closing six test factory stores in Wal-Marts indicates the doughnut chain was not giving itself any gold stars for the exercise.
Company spokesperson, Amy Hughes, said, “We’ve made a decision right now that the concept is not viable, but we’re going to continue our great relationship with Wal-Mart with our wholesale business.”
Krispy Kreme’s factory stores with their “Hot Doughnuts Now” signs make doughnuts on premises while wholesale stores have product brought in fresh daily. Krispy Kreme distributes its product on a wholesale basis in more than 500 Wal-Mart stores.
At the time Krispy Kreme opened its first factory store in a Wal-Mart, reports The Associated Press, the company said it was generating $20,000 in weekly sales at the unit. The typical factory store averages just under $70,000 a week. The Wal-Mart location, however, was still said to be profitable based on lower operating costs.
Ms. Hughes dismissed any notion that the decision to end the factory store test in Wal-Mart was related to Krispy Kreme’s financial problems.
Moderator’s Comment: Why did Krispy Kreme’s factory store test in Wal-Mart fail? Considering its current problems, what does Krispy Kreme need to do
to turn its business around? –
George Anderson – Moderator