| US

Premium coffee and food pays dividends for Dunkin’

Dunkin’ credits espresso, cold brew, and a revamped food menu for positive 2019 results, including 2.1% like-for-like sales growth in the US

Premium coffee and food contributed to 2.1% like-for-like sales growth across Dunkin's US business in 2019

Announcing its full year results to 28 December 2019, Dunkin’ said its global portfolio had expanded by 385 net new stores, including 211 new US locations, to reach over 13,000 stores globally. The coffee and food-to-go chain achieved like-for-like sales growth of 5.7% across its international portfolio and 2.1% in the US during the period.

Profits across its US business in the fourth quarter increased to $124.3m, an increase of $4.5m on the previous year’s period, with Dunkin’ returning $36m to shareholders, including $31.1m in dividends.

In a press statement, Dunkin’ said an increase in average ticket sales was driven by premium espresso, cold brew, and a revamped food menu, which includes its vegan Beyond Sausage sandwich.

Strong sales of premium products will be welcome news for the traditionally value-focused US coffee chain. In September 2018 Dunkin’ announced a major coffee-focused rebrand placing premium beverages, such as espresso and cold brew, at the centre of its growth strategy.

“Better quality food and beverage enabled by better equipment is a cornerstone of the Dunkin' Blueprint for Growth, which is the reason we are investing $60m in high-volume brewers for our franchisees' restaurants in 2020 as part of our commitment to beverage leadership,” said Dunkin’ CEO David Hoffmann.

Dunkin’s focus on premiumisation is shrewd given slowed outlet and sales growth in the US coffee shop market, with 80% of US industry leaders surveyed by World Coffee Portal in 2019 identifying cold brew as the fastest growing product in coffee shops.

Dunkin is the second largest coffee chain in the US behind Starbucks, with its 9,700 locations comprising more than a quarter of the total US branded coffee shop market.

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