But I still love their donuts
Krispy Kreme just can’t seem to catch a break these days. Once a darling of Wall Street, touted by many pundits as a sterling example of “best” and such …they’re now being slammed for all angles…including their previously loyal customers. Most recently, an Illinois judge ruled they had to keep send supplies to a franchisee that can’t pay. (?)
I see KK as a classic case of getting too big, too soon. Putting aside the Atkins issue, they’ve had deeper problems. And, really, I don’t see a marked difference in people’s girth in America, despite all the fads, so somebody is still eating carbs and heaping helpings.
Some say the beginning of their downfall was when they went public. (And, their management has been a problem as well.)
From a marketing perspective - they went off the rails quickly.
1. They lost their “cult” specialness. Their ubiquity has worked against them. I first fell in love with KK on a biz trip to Florida, and from then on went out of my way whenever down South to get their donuts - and, would eat five at a time, since I knew I couldn’t get them again when I got home to Philly. When they opened a store in Wilmington, Delaware, I’d drive 45 minutes on a Saturday morning to watch the dough bob in the oil and eat (yep) three to four donuts.
Compare and contrast to Starbucks ubiquity. SB offers an experience. When I’m at Starbucks, I feel like nothing really bad can happen - nice surroundings, cool music, comfortable chairs. At KK, I can just feel my hips growing and my fingers are sticking together.
2. Overexpansion. Classic case of a niche/cult company growing too much, too fast. This hurts both brand value and (almost always) product quality, as well as adversely impacts profit. Per store revenues go down as locations poach each others’ customers. (and, the Atkins craze did have some impact.)
3. Even I can only eat so many donuts…and I don’t want them every day. So, it follows there is a finite market, no matter how good the product is and how well it’s “pitched” to people.
Yes, I still love their donuts - when they’re hot and fresh. But, I don’t drive out of my way to get them.
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July 28th, 2005 at 7:00 pm
I hear ya. In the old days of marching thru Port Authority in NYC on my way to the gym at 5 a.m., the smell of KK used to torture me as it wafted thru the terminal. I literally had to hold my breath to make it without succumbing to the ultimate warm comfort food.
How difficult it was, when trying to exude over KK, that a friend would say, “I tried ‘em.. they aren’t so great.” Turns out they would have purchased a box of cold KK’s at a convenience store or hotel lobby. Ubiquity really worked against them… as did their questionable accounting activities…
July 29th, 2005 at 8:38 am
My downfall was the stand in Penn Station. I succumbed more than once…juggling briefcase, laptop and the KK bag, with the cool retro logo. Sad to say, fried dough doesn’t travel well. (As you did, I had more than one friend sniff dismissively about the heavenly donut.) You would think somebody in the company would have thought of that. (and, also remembered little things like ethical accounting.)
February 1st, 2008 at 9:23 am
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