Restaurants are in ‘fight mode right now,’ says Dunkin ‘Brands CEO

A Dunkin ‘worker delivers coffee out of the car window wearing gloves and a mask as the Coronavirus continues to spread on March 17, 2020 in Norwell, Massachusetts.

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When the pandemic hit the United States, shutting down big and small restaurants across the country, Dunkin ‘Brands leaned on its model on the go and made quick decisions to satisfy changing consumer preferences. CEO Dave Hoffmann says that quick thinking and reducing the red tape that can stop changes at major companies led to an expansion of curbside pickup now to 1,400 locations and delivery to more than 5,000 stores.

Today, 96% of Dunkin ‘and Baskin-Robbins locations are opened across the country, and customers are turning even more to mobile and contactless options.

The coffee company continues to update its locations and may close over 800 of its underperforming stores. But traffic challenges continue across the industry, and Covid-19 cases continue to rise across the country, disrupting routines and keeping consumers at bay.

“We believe there are two main forces that we are going to operate against: health and safety … and access to the brand,” Hoffmann said in an interview on Thursday. “Making quick decisions based on the best information you have available is what our team really learned during the crisis.”

Gone are, or at least stopped, the breakfast wars that have long gripped the restaurant and fast-food industries as daily commutes are disrupted for the foreseeable future with so many Americans working from home during the pandemic.

Dunkin’s breakfast and snack menu is good for consumers during all parts of the day, Hoffmann said. And its beverage innovation, from espresso to Matcha and Refreshers options, which are bringing in a younger female demographic, has the company well positioned to compete.

“We believe the industry is in a fight mode right now, and we are preparing for that fight,” said Hoffmann. “We are a long way from waving a victory flag in a big way, but we like to see our offer reach the fall and winter seasons.”

The company just reported that second-quarter earnings outstripped bottom line results, with same-store sales declining by 18.7% in the US At the height of the pandemic in April, sales in the Same store fell 32%, then 17% in May, 9% in June, and now through July 25, this key metric dropped at a low single-digit rate.

Despite that progress, Dunkin ‘shares were trading lower on Thursday, recently falling nearly 4%. The stock, which has a market value of $ 5.7 billion, is down more than 9% since the start of the year.

The learnings from the first coronavirus outbreaks in its two main markets in Boston and New York have prepared the company for a second wave, given that 90% of transactions were some form of takeaway before Covid.

“We learned a lot during the quarter on how to operate in a pandemic,” said Scott Murphy, president of Dunkin ‘Brands Americas. “Whether it’s protection vehicles, sidewalk, delivery or face mask shields, we’ve done a lot of research and it turns out that people feel safe going to Dunkin ‘.”

The company is also financially stable, Hoffmann added, as Dunkin ‘restored its dividend this quarter.

Digital will be a big focus going forward, he added, with 4.2 million active users on their digital platforms in the past 90 days. Dunkin ‘recently added Philip Auerbach as chief digital and strategy officer to continue to grow this part of the business, with digital, IT and data science teams under Auerbach.

“Our complete set of digital assets today yields 21% of transactions,” said Hoffmann. “Mobile ordering and picking is 7% of traffic … All we have done is open that access for customers to access our brand on their terms in the most secure manner possible.”