Doughnuts at your door: Dunkin’ is latest company considering delivery
Dunkin’ Donuts Chief Executive Nigel Travis told CNBC that the company would test doughnut delivery services.
Fast-food delivery might not be limited to pizza anymore.
Dunkin’ Brands Group Inc. Chief Executive Nigel Travis told CNBC’s “On the Money” that delivery was “clearly a big opportunity” for the Quincy, Mass., company.
Scott Hudler, vice president of global consumer engagement for Dunkin’ Brands, followed up Monday with a statement that delivery was something the company would be “evaluating in the future” and could integrate with a mobile ordering platform that is under development.
Dunkin Brands, parent of Dunkin’ Donuts, would join a growing list of fast-food purveyors including Taco Bell, McDonald’s Corp. and Starbucks Corp. that are venturing into delivery.
The reason? Analysts say these companies are emulating the success of e-commerce deliveries in other areas like retail or grocery.
In late May, Amazon rolled out free same-day delivery for Prime members in several metropolitan areas, which garnered some early positive feedback from customers.
Early adopters of delivery service include fast casual chains like Chipotle Mexican Grill Inc. and Panera Bread, both of which have reputations for healthier fare at a time when consumers are trying to eat better.
Two things will determine the success of these fast-food delivery services -- cost and quality, said Julia Gallo-Torres, senior food service analyst at Mintel.
Dunkin’ consumers are already cost-conscious, she said, so the company will have to walk a fine line between profits and the price of convenience.
If companies can successfully integrate delivery into their operations, it is “likely to boost revenues,” said John Staszak, analyst at Argus Research.
But just because these companies offer delivery services doesn’t mean the customers will come, Gallo-Torres said.
“Sales really haven’t been very friendly for McDonald’s or other fast-food chains,” she said. “The question becomes, ‘Is it really a competitive advantage to offer delivery at this time when the brands are struggling already?’”
Shares of Dunkin’ Brands were down 52 cents, or 0.99%, to $51.95 in mid-day trading.
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