Krispy Kreme goes dark. The Charlotte, NC-based donut chain with more than 10,000 locations in more than 30 countries is turning to dark stores (delivery-only locations) to expand its digital presence while keeping expenses down.
In a call with analysts Tuesday, Feb. 22 to discuss the company’s fourth quarter 2021 results, CEO and Chairman mike tatterfield discussed the chain’s efforts to expand “hotspots” for its delivery business.
“Following a successful pilot in the UK, where we achieved nationwide delivery coverage and over 50 dark shops, we are now expanding capabilities into the US and Mexican markets in 2022,” Tattersfield said. “This will allow us to expand our e-commerce capabilities in a capital-efficient way into our existing hubs.”
According to data from PYMNTS’ new Restaurant Friction Index, created in collaboration with Paytronix, which is based on a survey of more than 500 quick-service restaurant (QSR) and full-service restaurant (FSR) managers across the United States, almost all major restaurants offer delivery options . The study found that 97% of top and top performing restaurants offer delivery, while only two-thirds of the bottom performers do the same.
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For the full year, 17% of retail sales were made through digital channels, a significant increase from less than 10% of the e-commerce sales mix before the pandemic. The company intends to increase this figure to 25% of all sales “over the long term”. The company’s digital sales are lower than many of its competitors. The PYMNTS study found that 41% of all restaurant sales come through digital channels.
“We benefit from the fact that the majority of our e-commerce business comes directly from our own channels, and we continue to build our capabilities,” Tattersfield said.
He cited the example of a promotion in December that drove so many digital transactions that overall sales for the day increased 50% year-over-year.
The study found that restaurants can take advantage of consumers’ reluctance to pay additional fees to aggregators to encourage them to adopt direct-order channels. The most common reason aggregators give for staying away is that they don’t want to pay third-party delivery or service charges.
Another sales channel that has “passed” for the brand in recent months is the company’s chief operating officer and chief financial officer. Josh Charlesworth told analysts, is a drive-thru.
Drive-thru is a high priority for a large portion of restaurant customers, according to data from the February edition of PYMNTS’ Digital Divide study, “The Digital Divide Report: Technology As A Catalyst For Restaurant Purchases,” also created in collaboration with Paytronix.
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The study, which draws on a census-balanced survey of more than 2,400 American adults, noted that 38% of consumers say drive-thru pickup options would encourage them to shop at restaurants. Additionally, the study found that 49% of restaurants offer the ability to pick up drive-thru orders, and 18% of restaurants do not offer this option but plan to invest in the channel in the future.