Dunkin’ Brands Group Inc. (DNKN) plans to bring its colorful Baskin-Robbins ice-cream cakes to Germany next year and open more Dunkin’ Donuts stores in Europe as it sees the region bouncing back from the recession.
The company, based in Canton, Massachusetts, expects to have 150 Dunkin’ Donuts shops in Germany within five years, up from 35 currently, with more outlets from Munich to Hamburg, Chief Executive Officer Nigel Travis said in an interview. It’s also looking at opportunities in France and the U.K., he said.
“We’re very excited about Europe,” Travis said over coffee and biscuits in the lounge of a Westin hotel in Frankfurt. “Europe is about to start recovering. Germany is a very strong coffee market and bakery market.”
Dunkin’ Donuts, which was founded in 1950 and offers more than 70 types of donuts, came to Germany in 1999, first opening stores in Berlin and its surrounding area. As it exited other European countries such as the U.K. in the 1990s, the retailer stayed in the region’s largest economy. Germany, where the unemployment rate held close a two-decade low in July, is now one of the biggest focus for the company, the CEO said.
“It’s the perfect time to get in here because after the recession, real estate is a bit easier to find than it has been,” Travis said. “It’s a great time to find franchisees.”
Baskin-Robbins is starting to recruit franchisees and will focus on Berlin, Hamburg, Stuttgart and Munich. The chain, which sells ice cream with flavors such as Oreo nutty salted caramel and bluberry cheesecake, already has about 100 stores in the U.K. and 2 stores in Spain.
Dunkin’ Donuts has some core products, such as its original blend coffee and its Boston Kreme donuts, that are sold everywhere and it also localizes its offerings, Travis said. For some of its bagels, it uses bread similar to the one used for the bretzel, according to Carlos Vidal, Dunkin’ Donuts managing director for Europe, the Middle East and India.
“France is an interesting country and it’s certainly on our list to look at,” Travis said. “Pain au chocolat may look pretty good in Dunkin’ Donuts,” he said with a laugh.
The chain opened a store in Frankfurt in the spring and plans to have about 15 more stores around the financial city, Travis said. It’s planning to add about 50 outlets around Hanover, Stuttgart, Munich and Nuremberg, mostly this year. The company is also negotiating store openings in Hamburg, Vidal said. In the Europe Union, Dunkin’ Donut is present in two other countries: Spain and Bulgaria.
At the end of 2012, Dunkin’ Brands Group had franchisee-reported sales of approximately $8.8 billion. There are more than 10,500 Dunkin’ Donuts restaurants in 31 countries. Dunkin’ Donuts was No. 2 in Zagat’s 2012 Fast Food Survey for Best Coffee.
Dunkin’ Brands Group shares gained 2.9 percent to $44.45 yesterday in New York. The stock has jumped 50 percent in the past year, compared with a 26 percent increase in the Russell 1000 Index.
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