Fast-Growing Donut & Coffee Chain Plans to Double In Size
When you think of America's biggest donut slingers, major names like Krispy Kreme, Dunkin', and Tim Hortons would probably be the first chains that come to mind. However, those brands are set to get a fresh wave of competition in the coming years as a rival chain plans explosive growth.
Shipley Do-Nuts is a donut, kolache, and coffee chain founded more than 85 years ago in 1936. It currently operates more than 350 shops across 12 states, with Texas boasting the vast majority of locations. However, the company has a wildly ambitious goal to double its store count over the next five years, QSR Magazine reports.
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This means that by around 2029, consumers could see hundreds of new Shipley Do-Nuts locations pop up across the country. If Shipley Do-Nuts does achieve its goal of reaching 700 or more shops in the coming years, it still won't boast nearly as large a footprint as some of its big competitors. Dunkin' currently operates more than 13,200 stores across 40 global markets, while Tim Hortons has racked up more than 5,500 locations worldwide. Still, the expansion could be a major opportunity for Shipley Do-Nuts to introduce its coffee and donuts to scores of additional consumers.
The chain's ability to accelerate growth is thanks—at least in part—to Peak Rock Capital. The private investment firm purchased the formerly family-owned Shipley Do-Nuts in 2021 and made some big changes that helped kickstart expansion, like integrating online ordering and innovating its supply chain, according to QSR. The chain also rolled out its first-ever loyalty program, Do-Happy Rewards, in the third quarter of 2023 and had already gained 70,000 members by the end of the fourth quarter.
If the latest data is any indication, those tweaks are already paying off for Shipley Do-Nuts. The chain saw a 6.3% increase in same-store sales in 2023. Its average unit volume (AUV), or the sales each individual store sees on average, has also increased by 50% over the last three years, per QSR.
"This isn't an opportunity where we're looking for pennies," CEO Flynn Dekker told the publication. "There are a lot of dollars hanging out there because the business is just modernizing. We've got a product with that quality and consistency and variety that a lot of people have sort of abandoned in that market. And we come in with a very shiny, clean-looking business, and we've got all sorts of opportunities for product innovation and other things. So I think the upside potential here—obviously, I am biased—is huge."
Shipley Do-Nuts plans to start making progress on its expansion plans by opening 30 locations in 2024, compared to 19 new openings in 2023. So, keep an eye out just in case the chain arrives in your area in 2024 or beyond.
In other Shipley Do-Nuts news, the chain recently launched its first-ever limited-time offering: POPTASTIC do-nuts. The limited-edition treats are made from the chain's classic yeast do-nut, which is topped with strawberry or cherry icing and freeze-dried skittles. Customers can purchase the POPTASTIC do-nuts at locations nationwide through March 31 or while supplies last.
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