The parent company of Dunkin’ coffee stores will close 800 locations in the US permanently after suffering a 20 per cent loss in second quarter revenue, showing the economic impacts of the coronavirus on the storied brand.
The losses come as COVID-19 lockdowns meant fewer customers were stopping at Dunkin’ stores on their way to work.
The Canton, Massachusetts,-based company said the closings will impact ‘low-volume sales’ stores that only represented about 2 per cent of US sales in 2019.
More than half the locations to be closed are operated out of Speedway convenience stores, CNN Business reported. Those locations will be shuttered by year’s end.
Another 350 outside the US are also set to be closed, the company said. The company said it has a total of 11,300 stores across the world, with more than 8,500 in the US.
Shares in Dunkin’ were down about 5 per cent in trading on Thursday after the announcement.
That was down from $59.6 million, or 71 cents, from the same period a year ago.
Meanwhile, US same-store sales dropped 18.7 per cent.
Same-store sales still improved ‘sequentially throughout the quarter’ CEO Dave Hoffmann, in a press release. He credited new menu items designed to appeal to customers who now frequent Dunkin’ stores later in the day’.
Dunkin’ said it has stopped reopening dining rooms that were closed because of COVID-19 safety precautions due to the recent rise in new cases across the US.
Dunkin’ Group rebranded from the Dunkin’ Donuts name, which traces its roots to the original donut shop company started by William Rosenberg in Quincy, Massachusetts, in 1950.
The change reflected the company’s emergence as a significant competitor to Starbucks and McDonald’s.
In 2017, Dunkin’ Brands sunk $100 million into the Dunkin’ Donuts chain and sought the shorter name in response to how loyal customers already were referring to the company.
Dunkin’ Brands also owns Baskin-Robbins, a chain of ice cream stores known for featuring 31 flavors. US same store sales for the brand fell 6 per cent for the quarter.