The surprise move by a local franchisee to close more than a dozen Western New York Dunkin’ Donuts locations may indicate financial challenges, and may also offer opportunity for other local businesses.
Half of the area’s 26 Dunkin’ Donuts locations closed up shop on Tuesday morning in a move that surprised customers and, perhaps, even the Dunkin’ Donuts company. According to Dunkin’ Donuts’ corporate offices, the decision to abruptly close the stores was made solely by franchisee Page Ventures.
Burt Flickenger, III, managing director with retail consultant Strategic Resource Group, said a quick closing tends to be an indicator of financial reversals.
“You have higher rent, higher occupancy costs, higher healthcare and compensation cost, and the operating sales of the business can’t cover the bills,” explained Flickinger. “And, hence, the business can go from profitable to unprofitable quite quickly.”
Looking back over the decades of history of the doughnut business, Flickinger said competition between brands drew Dunkin Donuts westward out of the Boston area, and Tim Hortons south from Canada – with Western New York becoming a battlegrounds for baked goods and coffee. Buffalo, in particular, has long been among the most competitive markets in North America with both large regional chains, and smaller local businesses in the mix.
“It’s very difficult for Dunkin Donuts or anyone else to thread the needle between great local bakers like Chrusciki’s and good multi-regional and national bakers and coffee brewers like Tim Horton’s,” said Flickinger.
As local supermarket chains like Tops and Dash’s grew up, they came with their own high-quality baked goods. Flickinger said as that quality began to slip, Tim Hortons and companies like Chrusciki Bakery capitalized on the market. Dunkin Donuts joined in the opportunity, but lagged behind the competition.
For Page Ventures, the decision to close the 13 restaurants was intended to “create a leaner, more efficient business.” For local mom-and-pop shops, the move may be good news. Companies like Paula’s Donuts and Donut Kraze could take the opportunity to capitalize on the vacated properties and open new stores.
“Often times, the closed Dunkin Donuts stores have been built and have the engineering fit out for another doughnut and coffee shop operator,” said Flickinger. “So they can get leases at very good prices and be able to expand.”
Dunkin Donuts has had retail locations in the Western New York market for 50 years. Flickinger forecasted the chain will remain in the community, but it will be difficult to for them to maintain a size and scale to compete with the more dominant Tim Hortons.
Here is a list of the locations now closed:
- 1280 Sweet Home Rd Amherst
- 2155 Eggert Road, Amherst
- 727 Maple Road, Amherst
- 598 Main Street, Buffalo
- 9430 Main Street, Clarence
- 5090 Genesee Street, Cheektowaga
- 4395 Union Road, Cheektowaga
- 5760 Transit Road, Depew
- 4909 South Park Avenue, Hamburg
- 352268 604 Route 5/Route 20, Irving
- 3155 Delaware Avenue, Kenmore
- 6405 Dysinger Road, Lockport
- 2225 Colvin Boulevard, Tonawanda
