Dunkin Donuts Plans A Big Push West

Dunkin Donuts has big plans for a major expansion program into the Western United States. The privately held company is expanding into the territory dominated by one of its chief rivals: Seattle-based Starbucks.

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Long a favorite of the Northeast, Dunkin Donuts is moving west. The privately held company is expanding with the aggressiveness of, well, someone buzzed on caffeine and donuts, right into the territory dominated by one of its chief rivals, Seattle-based Starbucks. Dunkin Donuts hopes the sour economy will provide a sweet spot for its brand. NPR's Ted Robbins reports.

TED ROBBINS: The new Dunkin Donuts on the corner of Stapley and Baseline in Mesa, Arizona, is not the place to go for a relaxing cup of coffee, not this day, not with dozens of people frantically wiping, mopping, and inspecting.

Unidentified Dunkin Donuts Employee: Windows are done. Floors are being done now. Drive-thru, are we restocked?

ROBBINS: It's the day before the store's grand opening. Out front, there is an enormous, well, drape over the front of the store announcing that this is one of nine new Dunkin Donuts stores in the Phoenix area. All of them part of what the company calls an extreme makeover.

Mr. MAC SHIMMON (Vice President of Emerging Markets, Dunkin Donuts): In the West, our brand was a little tired, a little run down, less relevant.

ROBBINS: Mac Shimmon is Dunkin Donuts' vice president of emerging markets. In this case, emerging markets means the American West.

Mr. SHIMMON: So you see a lot of bright colors here, a lot of yellows and pinks and oranges, which are part of our original theme.

ROBBINS: They're kind of (unintelligible) '70s, isn't it?

Mr. SHIMMON: It's actually kind of '50s. So we pulled it through from where we were founded in 1950 in Quincy, Massachusetts.

ROBBINS: The new Dunkin Donuts has more mood lighting, movable tables and chairs, and things on the menu besides coffee and donuts, like flatbread sandwiches.

Mr. SHIMMON: For instance, this one on our menu here that you're looking on the left is our egg white breakfast flat. That's less than 300 calories. It's part of our "Better-For-You" menu.

ROBBINS: Don't worry, the jelly donuts are still there. Think of the place as something between McDonald's and Starbucks.

Mr. DARREN TRISTANO (Executive Vice President, Technomic): I think they go after the consumer demographic known as the value seeker.

ROBBINS: That's Darren Tristano. He's with Technomic, a food industry consulting firm.

Mr. TRISTANO: And this would be anyone from lower through middle class that is looking for good value, which means a very good coffee for a good price.

ROBBINS: With a weak economy, the company is counting on more people looking for value. They call them the Dunkin tribe.

Mr. SHIMMON: There's tribe members who live in Phoenix who don't even know they're part of our tribe. They're going to find out when they get the chance to use us. And they're going to go, wow, this is a great thing for us. They'll associate with us.

ROBBINS: In general, menu items here are about 20 to 30 percent cheaper than Starbucks, including coffee. Dunkin Donuts makes about 60 percent of its revenue on coffee. And despite the updated surroundings in the new stores, food industry consultant Darren Tristano says Dunkin Donuts' M.O. is more like McDonalds than Starbucks, which encourages customers to linger.

Mr. TRISTANO: Dunkin is much different. They're much more of a quick service model. They want you in and out. They're really trying to push people through the store.

Unidentified Dunkin Donuts Manager: Today, we are going to be walking through all of the headsets, how to use the headsets, how to talk and communicate.

ROBBINS: At the Mesa, Arizona, store, a manager trains employees on serving customers quickly in the drive-thru lane. The nine new Phoenix stores are just a start. Dunkin Donuts has plans for 150 in this area and 10,000 new stores in the next decade, starting in the Southwest, then moving towards Starbucks' home territory, the Northwest. Ted Robbins, NPR News, Tucson.

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