| US

Delivery and drive-thru keep Dunkin’ afloat during coronavirus

Coffee and food-to-go chain maintained delivery, drive-thru and takeaway sales during US coronavirus shutdown, but like-for-like sales suffered sharp 19.4% fall in the final three weeks to 28 March, 2020

A Dunkin' drive-thru in Long Beach, California, USA



Reporting its three-month earnings to 28 March, 2020, Dunkin’ said revenues across its flagship US market, which contains 9,500 of its 13,000 stores globally, rose 1.4% to $151.8m, with like-for-likes declining 2% during the period. The impact of coronavirus store closures across its international business was more pronounced, with revenues falling 20% to $5.48m and like-for-like sales down 7.1%.
 
Dunkin’s resilience in the US can be attributed to the coffee chain’s pivot toward drive-thru, takeaway, and an extended delivery service during the coronavirus crisis. Many US jurisdictions classified Dunkin’ as an ‘essential business’, the firm has said, which allowed it to continue trading in some capacity throughout the government-mandated shutdown. As of 25 April 2020, approximately 90% of Dunkin's US stores were open for business, the company has confirmed.
 
Dunkin’ had been on track to achieve much stronger Q1 2020 results in the US, posting 3.5% like-for-like sales growth in the first ten weeks of the quarter before a sharp 19.4% decline in the final three weeks to March 28.
 
"Prior to the crisis, we experienced strong first quarter performance across the system, including Dunkin' US, which was on track to have its highest quarterly comps in more than six years and positive traffic," said Dunkin' Brands CEO, Dave Hoffmann.
 
Hoffman also confirmed Dunkin’ had not yet applied for any US government furlough schemes. The company has instead opted to reduce costs through a voluntary 20% pay cut among its senior management team and has achieved $33m cash savings from the suspension of its dividends programme. Dunkin’ Brands also borrowed $116m as a ‘precautionary measure’ in March 2020, company documents show.
 
Dunkin’ has sought to emphasise higher quality products, such as premium espresso, cold brew and an improved food menu, since undergoing a major rebrand in late-2018. Earlier this year, the coffee chain hailed its premiumisation strategy a success after posting 2.1% like-for-like sales growth in 2019. Dunkin’ currently operates some 13,000 restaurants in 41 countries worldwide.

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