The American doughnut and coffeehouse chain, Dunkin Donuts has reportedly shut down more than half of its Indian outlets over the last two years and is relying on small stores and kiosks to cut costs. JFL, the company that launched India’s first Dunkin Doughnuts store, has downscaled its store count by half, making it 37, from what was 77 stores two years ago, claims Business Today.
An official statement by Jubilant FoodWorks Ltd. (JFL), the chain’s Indian franchisee partner, affirms the downsizing and cites that the company has already halved losses in the June quarter. As the year descends we may get to see a few more shut-offs, the statement claims.
The company also owns the exclusive franchise rights of the famous pizza restaurant chain, Domino’s Pizza, which has reportedly attained a 25.9% year-on-year in-store sales growth, by banking on everyday value pricing and product upgrades, as reported by trusted sources. In the June quarter, JFL opened 13 Domino’s restaurants, but only a single Dunkin Donuts store.
Sources aware of the downsizing plans said that besides catering, JFL plans to implement formats like carts and kiosks at crowded places. The company is experimenting with small format stores that are reasonable and are adequate for the portfolio, said a JFL spokesperson.
CEO Pratik Pota told states that JFL would achieve break even as the financial year for Dunkin Donuts finishes.
Quantum of losses for Dunkin Donuts have halved on a quarter on quarter basis, driven by JFL’s EBITDA at 55 basis points for the June 2018 quarter, which was 106 basis points in the fourth quarter of 2017. With the growing population of cafes and bakeries, JFL believes there is a place for Dunkin Donuts in that context, added Pota.
As per industry speculations, JFL is seeking a third brand. However, the company states that it is not in talks with other brands but would welcome new opportunities for growth.