Kripy Kreme expands into ice-cream as sales drop

Troubled doughnut and coffee chain Krispy Kreme is attempting to turn around three years of disappointing sales with the launch of new soft serve ice cream products.

Troubled doughnut and coffee chain Krispy Kreme is attempting to turn around three years of disappointing sales with the launch of new soft serve ice cream products.

The chain, which has maintained a strong consumer base in the United States for more than 70 years, is attempting to boost its declining sales with a new turnaround plan.

The group is experiencing financial setbacks, with its shares price dropping from $US50 at the start of the decade to $US2.23 earlier this year. Sales have dropped 6.5% from February to August in stores that have been open for at least one year.

Krispy Kreme chairman James Morgan laid out a new plan to regain investor confidence this year, including building less expensive stores, further international expansion and the introduction of its new soft-serve ice cream product.

Orex Recruiters & Brandish retail analyst Rob Lake says the group’s plan make sense, but it needs to focus on why sales have been declining in the first place.

“They give away huge amounts of product [and] they occupy some very high-rent locations. I think they’ve never become a part of the mainstream food industry.

“Their products would tend to be a more winter than summer offer, but of course that’s what they’re trying to change now.”

Lake says the move to introduce ice-cream is a step in the right direction: “It’s got to help. I also think they don’t sell their product enough hours of the day, they seem to be limited to the middle of the day.

“Fast food often tends to do better if they offer more products over more hours of the day… but it’s hard to see how they’ll do that.”

Krispy Kreme opened its first Australian store in Sydney in 2003, the first location opened outside of the United States. Today more than half of the group’s stores are based outside the US.