Dunkin’ Updates: Experiments With Menu As Baskin-Robbins Intl. Expansion Continues

DNKN: Dunkin' Brands Group logo
Dunkin' Brands Group

Dunkin’ Donuts, which is owned by Dunkin’ Brands (NASDAQ:DNKN), is among one of the many restaurant chains that are introducing new, limited-time menu offerings to increase footfalls in their restaurants. The move is intended to help the restaurants gauge customer response so that the successful products can be permanently added to their menus. [1] The company competes with McDonald’s (NYSE:MCD), Starbucks (NASDAQ:SBUX), Krispy Kreme, Dairy Queen and Cold Stone Creamery to name a few. We estimate a $29 price for Dunkin’ Brands, which is about 5% below the market price.

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Dunkin’ Donuts has added sun-dried tomato and pumpernickel bagels as part of its artisanal bagel line. Other items such as sesame, poppy seed and cinnamon raisin have been permanently added to its menu. And it’s not the only one experimenting with menu to attract more customers. Restaurant chain Panda Express has introduced Shanghia Angus Steak dish for about $4.25. Casual-dining chain Applebee’s has rolled out menu items with artisanal touches. Taco John has expanded its salad offerings and added two new items on its salad menu. [1]

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Restaurant chains are coming up with new ways, including expanding their breakfast offerings, to increase footfalls in their restaurants and eventually increase revenue per outlet. Certain costs, such as rental and employee expenses, are fixed to a large extent, so the incremental revenues can boost the profitability of the restaurants significantly.

Baskin-Robbins International Expansion Continues

Baskin-Robbins continues to do well internationally as it signed a new franchising contract with BRICE which will see the ice cream chain opening 25 new outlets in Mexico this year and at least 50 more outlets in the next few years. [2] Earlier this year, Baskin-Robbins opened three new outlets in Vietnam. Similarly, the company plans to open 25 new outlets in the Middle East this year.

Understand How a Company’s Products Impact its Stock Price at Trefis

  1. Restaurant chains experiment with flavors, nrn.com, April 11, 2012 [] []
  2. Baskin-Robbins signs franchise deal for Mexico units, nrn.com, April 11, 2012 []