Dunkin' pops 6% because it's onto the grand slam of fast food
Snacks / Thursday, October 31, 2019
Whip out the celebratory Boston Creme... Dunkin' shares rose 6% after its earnings report — the stock's tripled over the last 5 years as it dropped the "Donuts" from its name to focus on getting America to run on it. Investors are rewarding last quarter's commitment to the 4-part grand slam of chain restaurant profitability:
- Premium items: The 1 specific beverage mentioned in the entire earnings report: "Cold Brew" — Dunkin's new higher-priced option doesn't get latté-style barista art, but does drive profits.
- Breakfast: To make breakfast your daily habit, Dunkin' added menu items like the new Beyond Meat breakfast sandwich — it goes nationwide on 11/6.
- Digital Loyalty guilt: 25% of transactions in some cities are now paid with the "DD Perks" app. Dunkin' increasingly tempts you to return for that Coolatta with points.
- Delivery/Pick-Up: There's fast food peer pressure to deliver via 3rd party app. So even though your coffee routine is probably delivery guy-free, Dunkin has partnered up with GrubHub, just in case.
This is the new playbook for fast food... Chipotle is testing pickup, Shake Shack is pushing fried chicken sammies, and Starbucks' app is America's 2nd most-used mobile payment platform. Investors are evaluating fast food brands on this 4-part gameplan: Premium items, breakfast, loyalty apps, and delivery. Everyone's doing it.