Doughnut makers in Maine say they aren’t concerned about Krispy Kreme cutting into their sales when the large, national chain rolls into the state.
North Carolina-based Krispy Kreme Doughnuts Inc., a company famous for its fiercely devoted customers, said Monday that it has signed a development agreement with franchisee NH Glazed LLC to open four shops in New Hampshire and three in Maine over the next several years. NH Glazed did not respond to multiple requests for comment.
The franchise deal is consistent with Krispy Kreme’s stated mission of expanding in the Northeast, a region where it has very little presence. A previous expansion effort more than a decade ago was stalled when the publicly traded company ran into financial problems related to poor accounting practices, artificial sales inflation and alleged self-dealing. Since then, the company has rebounded and now has more than 1,000 locations worldwide.
The NH Glazed agreement, if fully executed, would expand the number of Krispy Kreme locations in New England to its previous high of eight in 2005. All but one of those stores – inside the Mohegan Sun casino in Connecticut – were closed subsequently as part of a restructuring effort to avoid bankruptcy.
“I think it’s a bold move, and aggressive,” Frosty’s Donut & Coffee Shop co-owner Shelby Omdal said about the recently announced expansion.
Frosty’s, based in Brunswick with five locations throughout the state, is one of several locally owned and operated doughnut sellers in Maine. Others include Tony’s Donut Shop in Portland, The Holy Donut in Portland, Little Bigs bakery in South Portland and Congdon’s Doughnuts in Wells.
Omdal said it remains to be seen how well the out-of-state chain will perform in Maine, where many consumers are intensely loyal to their favorite local doughnut shop.
“Mainers are very into the ‘buy local’ movement right now,” she said. “I don’t think they (Krispy Kreme) would be taking business away from us, or Tony’s, or Holy Donut.”
Little Bigs co-owner Pamela Fitzpatrick Plunkett said it’s possible that initial excitement over Krispy Kreme’s entrance into the market could draw some business away from existing doughnut shops in Maine, but that she doesn’t think it would last.
“In the short term, I think any new business … affects everybody,” she said. “The proof is in whether they can stick it out for a year or two.”
Plunkett, who opened Little Bigs in 2013 with her husband after the couple moved from Chicago to Maine, said it took a few months for their business to build up a regular following, but that many customers have stuck with it.
“They’re incredibly loyal … and they won’t stop coming,” she said.
The dominant doughnut seller in Maine – Canton, Massachusetts-based Dunkin’ Donuts – also said it is counting on customer loyalty to remain strong.
Although the company did not specifically reference Krispy Kreme, Dunkin’ Donuts responded in writing to a request for comment by saying that the chain’s extended hours, low prices and varied product offerings have made it a mainstay throughout the region.
“Our guests across New England are loyal to Dunkin’ Donuts because of the many ways we work to give them an unsurpassed guest experience, including our speed of service and the great value we offer,” a company spokeswoman Michelle Thompson said.
Christopher Hall, CEO of the Portland Regional Chamber of Commerce, agreed that local doughnut shops aren’t likely to be harmed by a Krispy Kreme expansion. He characterized it as a win for everyone in Maine, saying it will create jobs – including some with decent salaries, contribute to local economies and give consumers more choice.
“Who doesn’t love Krispy Kreme doughnuts?” Hall said.
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