That’s How the Krispy Kreme Krumbles

Nov 27, 2002
George Anderson

By George Anderson

Peter Oakes, an analyst with Merrill Lynch is concerned that there is a hole in Krispy Kreme’s strategy for growing its retail franchise.

An article on the Multex Investor web site, says that Krispy Kreme’s decision to sell its doughnuts in other outlets will hurt its ability to expand its own store network.

According to Mr. Oakes, Krispy Kreme is already being hurt in Florida because of the “inconsistency and ubiquity” of its products in that market.

While Mr. Oakes is offering a caution on Krispy Kreme, he is not unaware of the chain’s meteoric growth rate. “To our knowledge, no restaurant company has layered four consecutive years of double digit comp gains on top of each other, like KKD is about to do.”

Moderator’s Comment: Is Krispy Kreme overextending
itself? [George
Anderson – Moderator


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