Krispy Kreme is planning to build delivery-only locations in the U.S. and Mexico this year, the company said during its Q4 2021 earnings call. This announcement follows a pilot in the United Kingdom, which grew to include more than 50 “dark shops.”
Dark Shop Concept
“What we do with dark shops is just another opportunity to get another spoke, which increases the ability to have delivery along the route, which we couldn’t do directly from one of just our hubs. So it’s a low-cost investment, but it gives you a fresh doughnut drop that can get to that customer.” Said Krispy Kreme CEO Mike Tattersfield.
“It’s a low-cost investment, but it gives you a fresh doughnut drop that you can then get to that customer in there.”
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The dark shops are not ghosting kitchens because the company doesn’t prepare any food there. It’s just a location where the company brings its doughnuts to every day. Customers within a 20-minute radius can then order doughnuts delivered from such shops.
Krispy Kreme Delivery-only Concept
Krispy Kreme has converted its business to a “hub-and-spoke” model, in which it delivers doughnuts from larger shops where it makes doughnuts, or hubs, to smaller shops and in-store kiosks.
The company tested its delivery-only shops in the U.K. providing national coverage from more than 50 such locations. They said they are building up capabilities into the U.S. and Mexico markets this year.
Krispy Kreme has also used campaigns, such as the “Day of Dozens” to offer promotional codes and drive more business to its delivery channels.
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Krispy Kreme’s off-premise business has been successful in markets like the U.K. and Australia. It generated up to 40% of the sales mix in 2018, well before the pandemic accelerated off-premise channels.
Other markets have since adopted more off-premise access points facilitated by digital capabilities. In the U.S. Krispy Kreme began focusing more on digital sales in 2019 with a store remodel that integrated in-store ordering with online orders, delivery and an area for mobile order pickup.
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