Adding supplementary products and doughnut varieties has helped drive demand
Los Angeles, CA (PRWEB) June 04, 2012
The Doughnut Stores industry is estimated to generate $11.6 billion in 2012 revenue thanks to companies like Dunkin' Brands (estimated 57.5% market share) and Krispy Kreme (4.6%) expanding their product choices and helping drive demand for doughnuts. For example, Krispy Kreme recently announced three new signature coffee blends, and that it will offer them to consumers in packaged form by the end of 2012. “By providing coffee and other products in addition to doughnuts, industry operators hope to attract consumers to their stores more frequently,” says IBISWorld industry analyst Brian Bueno. “Another tactic that doughnut stores are using to boost consumer interest is offering smaller doughnuts, which have fewer calories and less fat. These appeal to health-conscious consumers who may be inclined to indulge more often when smaller portions are offered.”
Doughnut Stores industry revenue is projected to increase at an annualized rate of 2.5% over the five years to 2012, despite the economic downturn. In 2012, in particular, revenue is expected to jump as stores recover from the slowdown. Revenue growth slowed and declined in 2008 and 2009, respectively, because of low consumer sentiment and personal disposable incomes. When consumers have little discretionary income, they tend to cut back on even small indulgences like doughnuts. “Although the recession pulled consumers away from doughnut stores, it did not lessen their sweet tooth entirely,” says Bueno. “Instead of purchasing doughnuts from specialty shops, consumers were more likely to buy lower-cost doughnuts from grocery stores.” Patrons are now returning to doughnut stores, but this example illustrates potential competition for the industry. When Americans are strapped for cash, they will find low-cost alternatives to their discretionary purchases, including doughnuts.
Over the five years to 2017, as positive conditions in the overall economy place upward pressure on consumer spending, IBISWorld projects industry revenue to accelerate. The number of industry locations is also projected to grow, while the number of companies remains largely stagnant because most growth will be dominated by industry giant Dunkin' Brands. Overall, the industry has a medium level of market share concentration. Because Dunkin’ Donuts’ growth significantly outpaced industry revenue growth over the past five years, its market share concentration expanded over the period. Most industry operators are regional companies with limited plans for market expansion. For more information, visit IBISWorld’s Doughnut Stores in the US industry report page.
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IBISWorld industry Report Key Topics
This industry is comprised of establishments that primarily prepare or serve doughnuts, or donuts as they have come to be spelled in the United States. Purchases may be consumed on-site, taken out or delivered. A doughnut is usually sweet, deep-fried flour dough that has been shaped into a ring or sphere. Some contain fillings, such as jam or custard, and some have toppings, such as frosting or sprinkles.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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