Dunkin' Donuts To Close 100 Stores in the U.S

Sad news for Dunkin' Donut lovers! Dunkin' Brands will be closing 100 Dunkin' Donuts stores in the U.S in the next 15 months, starting the last quarter of 2015. 

Based on the report, the company did not provide a list of stores that would be shut, but said that they were all owned by the Speedway gas station and convenience store chain.

According to CNN Money, Dunkin' explains that the store closings is not reflective of the company's revenue as plans of opening more stores in California is underway.  But it seems that Dunkin' franchisees made the same mistake of its rival Starbucks, by expanding too aggressively resulting to having only 1.1% same-store sales growth for the third quarter of this year as opposed to last year's 2.0%. Dunkin' disclosed the news in a regulatory filing before its annual investor and analyst day last Thursday.

Paul Twohig, Dunkin' Donut Canada President said that the company was disappointed with the recent results in the U.S. He further explains that Dunkin' was making menu improvements to boost sales ad hyped up products like Pumpkin Macchiato and Maple Bacon Square Donut.

But since there were unstable prices of ingredients, particularly the spike in egg prices due to the avian flu outbreak in the U.S. Twohig added that the company and its many franchisees are also "anxious" about minimum wage hikes that are set to go into effect across the country.

On top of rising food and labor costs, Dunkin' will have to face another challenge as breakfast wars and coffee lovers continues to intensify.

"Krispy Kreme (KKD) has struggled due to the competition. McDonald's (MCD) just made breakfast an all-day option. Starbucks (SBUX) continues to dominate the coffee market. And Tim Hortons, owned by Burger King parent company Restaurant Brands (QSR), has also been posting strong levels of growth lately."

Analyst have also expressed concerns about promotional gimmicks, such as this week's National Coffee Day. Although Thursday had strong consumer traffic,  giving away medium hot and iced dark roast coffee for free did not do anything to pull up the company's profits.

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