Anyone notice the New York Times article today on the McDonalds in NYC that's selling hot glazed donuts? A NY franchisee came up with the idea and convinced headquarters to let him give it a try. Looks like he's off to a good start. (To see the article go to nytimes dot com and search for mcdonuts).
I know they aren't the same as KKs but it makes me wonder how high the barriers to entry are in this market. What if other fast food chains start installing the machines in established locations before KKD can expand?
I loved the Mcribs. They bring it back from time to time for special promotions. I like the chicken burritos too, but you only get them at certain McDonalds. The thing to remember is Mcdonalds is constantly reinventing itself. KKD has one product and one marketing gimmick. In fact I saw a kid, about three, wearing a KKD paper hat today at the market. I remember getting those at Mcdonalds when I was a kid. Did you know that when Mcdonalds first started they only hired men/boys?
"Also, it may not be difficult to make donuts. But it won't be easy to duplicate or exceed the total experience, meaning the quality of the product and the mental association the consumer makes between KKD and something that's both easily attainable and extra special."
Come on, you're not really talking about the total experience of eating a donut are you?
Where I grew up, we had a Krispy Kreme across town. I'm 30, and it's been there as long as I can remember. I'll give you that they have a better product than the others. But not so much better that people regularly drove across town to get them - when there were a couple of closer donut shops. Sure once in a while, (maybe twice a year) as a special treat, we'd go across town and get KK donuts. They were really good donuts, but not an out of body experience.
When the hype wears thin, most people will not drive across town to get KK donuts. They will buy donuts from the most convenient source...whether that is from Dunkin Donuts, Mickey D's, some local mom and pop shop or whomever. And if KKD opens up a shop on every corner, they won't be a special treat anymore, just another donut.
(Will is short KKD)
OK, your claim is valid. Maybe we should start a chain of hot fish stores. Police direct traffic due to the overwhelming demand for boxes of hot fish. People at work say, "Wow! Hot Fish!"
I haven't heard the joke and I'm afraid to ask. Remember, this is a family board...
"And the signage? "Hint of fish now!" "
Careful now, I've already filed for trademark protection on that. Actually reminds me of an old joke regarding a wood sniffer and tuna boats...if you know that one.
Very reasonable post, heehaw. I actually agree with you. In fact, I made the point first. But don't be thinkin' about it too hard or you might have to back off on your "strong buy" sentiment. From my experience here, strong buy longs are not thinkers.
McDonald's will pursue donuts if their profitability exceeds their floor-space and other investment requirements by a sufficient amount.
It's wise of them to see if the New York experiment will work. Will it? We'll see.
>it's a last ditch effort by McDonald's to keep their stock over 20<
I don't think so. I believe it's a smart play by enterprizing McD franchizees in prime locations to boost individual store earnings. Furthermore, I think there's plenty of other busy soccer moms out there whose kids DO eat McD's (including my 4 grandchildren) who would be happy to grab a dozen hot glazed McDonuts as they drive through the line to pick up those happy meals. I ain't just a TYC tycoon, I'm a grandpaw, too!
"Yeah, uh huh, sure. They did that with McPizza too: outsold Pizza Hut by 10X within a year.
Are you long McD?"
I didn't say that they could do that with pizza, pizza is different...but nonetheless, Pizza Hut has a few more stores than the "Big Gorilla", catagory killer KKD with it's 220 stores.
(Will is short KKD)