Mike Tattersfield, CEO of Krispy Kreme, is not too worried. Instead, he sees the flagship store, opening Sept. 15, as just one part of the market’s growing “donut ecosystem” in the city.
“We were thinking about how to manage a mile-long line to get in, but we will not encounter that today,” he admitted in an interview with CNN Business. “It’s even further to unlock new channels of growth,” he said, including delivery that launched nationwide in late February.
Tattersfield said it checks the ability for social distance with online reservations to enter the store if it gets too full. Employees will also wear masks and have daily temperature checks. The September opening is more than four months after an originally planned start date of May, which was kicked off due to the virus.
The number of average daily visitors to the 10-block Times Square area is slowly increasing from the low in April, when it decreased 91% compared to the same month a year ago, according to the Times Square Alliance. In July, the visitor count was 83% down compared to 2019.
Perhaps more concerning, at the intersection where Krispy Kreme is located – 48th St. and Broadway – the visitor number was 90% year-over-year for July, with little improvement showing from April when it was 96% down.
With figures like that, Neil Saunders, CEO of consulting firm GlobalData Retail, does not predict a sweet future – at least in the long run.
“Under normal circumstances, a Times Square store would be a magnet for customers, especially tourists,” he told CNN Business. “But these are not normal times: Foot traffic is decimated, tourism has dried up and both of these things mean that stores will operate well below their potential.”
He added that a “case could be made” that the location could eventually become a standout for Krispy Kreme. “But there’s still an enormous question mark over if and when things will return to normal,” Saunders said.
Tattersfield said that stats like that meant it would not meet sales projections it had originally planned, but it did not mean Krispy Kreme would give up on the location that had been in the making for three years.
“We expect this to be a pretty long build-up for us, with more than one-year plus to get to volumes we anticipate,” he said. “It’s an opportunity for us to grow and look at our other channels that want access but don’t have enough access in New York City.”
Tattersfield described Krispy Kreme as a ‘branded donut company’ instead of just being focused on its restaurants. “It’s about creating the right access to donuts, whether it’s hot or fresh, and doing so through delivery, wholesale or extended shelf-life products.”
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