Dive Brief:
- Krispy Kreme is opening six locations in New York City and will reopen a refurbished Penn Station shop Thursday, according to a press release. The first of the new units will open Feb. 4.
- Among the six new locations will be a flagship Times Square location set to open in May that will cover 4,500 square feet and feature the world's largest Hot Light, stadium seating to view the doughnut theater, immersive and interactive digital activations and exclusive merchandise. It will be open 24 hours a day.
- The restaurant will hire 400 workers to support its expansion in the city.
Dive Insight:
Krispy Kreme's New York City expansion is the brand's largest build-out in over 10 years, according to Eater, but it's not the first time it's made a bid to take over the Big Apple. Still, its past attempts were unsuccessful. In 2009, the franchise closed five of the six locations that it operated in New York City, leaving only the Penn Station shop.
The chain has also been busy remodeling 350 of its stores, rolling out a prototype North Carolina store in 2019, and piloting new menu items at some locations, according to CNN, which includes more sweets, such as milkshakes and customizable doughnuts. The remodels may help overcome the brand's limited menu offerings, bringing a dramatic transformation to its overall look and feel with a redesigned doughnut theater experience to engage consumers. New display cases and menu boards complement the store's design, which offers a complete view of the doughnut making process. Consumers are increasingly motivated by experience-driven retail experiences, so this investment seems to a be savvy move.
During its long tenure, the brand has dabbled in diverse menu offerings in the past, including things like soup and ice cream. Chief competitor Dunkin' broadened its menu within the last two years to more than just glazed confections, focusing instead on premium beverages to differentiate and drive sales. But Krispy Kreme has stuck to its core offering, with some variations, and that seems to be working. And for retailers like In-N-Out, a limited menu has been a brand hallmark that keeps loyal consumers loyal as other chains toy with limited-time offerings or swap out items on a regular basis.
Krispy Kreme has a lofty challenge ahead, however, thanks to Dunkin's hold on the New York City market. The brand runs the most stores out of any chain in New York City, with 636 stores as of December 2019, including 12 additions last year. In addition to offering a more diversified menu, Dunkin' has also recently made steady investments in technology, loyalty programs and app interfacing to attract and retain customers. And while Starbucks may not serve doughnuts, it's a titan in the breakfast space, has a growing loyalty program and is making aggressive moves to secure customers, especially in New York, where it opened a Reserve Roastery in 2018.
