Dunkin’ Could Get a Boost With Donut Day Driving Traffic

(Bloomberg) -- It’s National Donut Day, and for at least one coffee chain, the giveaway could be exactly the sweetener it needs.

Dunkin’ Brands Group Inc. has taken a hit as the coronavirus pandemic translated to fewer morning commuters to drive sales at its coffee chain. And while BTIG analyst Peter Saleh said the promotion’s impact on sales is “very nominal,” the promise of free glazed treats could boost traffic at Dunkin’ coffee shops.

“It’s an opportunity to reach back out to your guests and remind them to come back in,” Saleh said in an interview.

The coffee chain is offering customers a free classic donut Friday with the purchase of any beverage, while JAB Holdings BV’s Krispy Kreme turned the promotion into a week-long event. In 2019, Dunkin guests ordered 11 million donuts on National Donut Day, the most donuts ever moved in a day, a spokeswoman for Dunkin’ said in an email.

Dunkin’ U.S. quarter-to-date comparable store sales declined about 23% for open stores as of the week ended May 23. However, with most customers still off of their usual schedules, the chain has seen double-digit comparable store sales growth between 11 a.m. and 2 p.m., which could help offset some of the slump at breakfast time.

“You’re probably not going to offset all of it until we get back to some sort of normal, but it’s nice to see double-digit gains in that early afternoon hour,” Saleh said.

Dunkin’ Brands was little changed Friday, but the stock is up more than 70% from a March low.

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