Krispy Kreme CEO Mike Tattersfield joins Yahoo Finance to discuss the company’s new flagship store in Times Square, New York City.
BRIAN SOZZI: Sweet news during this pandemic. Krispy Kreme Doughnuts just announced it's opening its first-ever flagship store right in Times Square in New York City, and we have Krispy Kreme CEO Mike Tattersfield joining us now from that new location to discuss. Mike, good to see you.
That certainly looks like one sweet-looking location, full on doughnut theater, but it's also a big bet. Listen, we're in the midst of a pandemic. Times Square, the photos I've seen, is still empty. Why are you still opening this store now?
MIKE TATTERSFIELD: Well, we've been working on this-- so good morning, first. How's everybody doing?
We've been working on this shop for the past three years. We've been looking to invest in New York. We've had a shop in Penn Station since 1997, and so we saw the demand. It's a very craveable brand. And, you know, when the pandemic hit, what we wanted to do is-- we pushed the opening from May to September, but we did open up four more shops in New York. And we were able to figure out from all of the safety procedures, from whether it's barriers, masks, gloves, and everything that we need to do to ensure Krispy Kremers are safe, we could see we could operate in New York. Safety and demand was there, right? And this was in different parts of the city.
So because we have a flexibility in this shop, we decided to open up, and our plan is to open up on the 15th of September. The unique part of it is Krispy Kreme-- you know, if you think about a shop, we think about ourselves as a multichannel business. So you start with these hot light shops that can deliver fresh doughnuts to fresh shops daily. We can also deliver a fresh doughnuts to a wholesale. In fact, we just started a partnership with Duane Reade in the market, so there's now 30 Duane Reades in the market getting fresh doughnuts from us every day. And then you can extend that into even another line of business that we've opened up which is a extended-shelf-life product that we just launched in Walmart.
But coming back to we think this is the right time. And yes, it's not going to be the same traffic patterns as we see. We acknowledge that. But we also have-- and the shop's amazing, and it's what you'd expect from, you know, a company that wants to be the world's most loved sweet-treat brand. It has capacity of doing 380 dozen doughnuts per hour. That is a lot of doughnuts, right? We can actually break that out into two parts of the stores. There's two producing lines. We have an ability to do access where we can just have-- one of the lines can just serve the front street. So we have the ability of having a street-side location.
And you can come into the shop as well. There's limited seating. It was always designed that way. We didn't change anything because of the endemic. And we just made sure that we have pretty rigorous safety pieces as we plan on opening the shop.
ALEXIS CHRISTOFOROUS: Hey, Mike, in terms of other shops that you plan to open, I mean, this flagship is pretty amazing. You've got a glaze waterfall. I mean, it really is--
MIKE TATTERSFIELD: is.
ALEXIS CHRISTOFOROUS: Brian said it nicely, you know, a doughnut theater. But I know that you were on target to add 450 shops by the end of 2022 at a time when you've got competitors like Dunkin' and McDonald's and Starbucks closing locations. Why do you feel so confident? What do you know that they don't know that has you opening up all these shops?
MIKE TATTERSFIELD: So I'll answer you in two ways, right? So first, we're going to be opening 20 locations in the US and overall globally over 60. So that gives you an idea that we're on track. We've opened up 150 shops in the last two years.
So here's what we learned. What we learned in February when we saw the pandemic starting to come, I spent a lot of time in the shops. And as states started to close businesses or require restrictions, a lot of my time was just focused on safety for what we could do so we could operate, and would the customers continue to come?
And, you know, we did something on St. Patrick's Day where I was able to see the demand as I visited shops where our business doubled that day. So people were coming in there, and they were using our drive-throughs even our front doors were closed.
We then really changed our marketing program for what we call acts of joy. And that is really being in the locations that we visit, the shops normally do a lot of community work. So we were first movers with the health care, and with the health care, anybody who showed up with a badge, you could get all the doughnuts you want, right? And we did that for four Monday's in a row, and the response was amazing.
We then started to do a double dozen offer where you could drop off your doughnut-- your dozen to your neighbor secure. So neighbors would drop off to neighbors even though they were restricted in travel.
So you get these acts of joy, and we did something with seniors where they weren't going to be able to graduate, but it was amazing. So the net-net of it is our top line in the US has been up double digits. Our bottom line in the US has been up double digits since the pandemic.
BRIAN SOZZI: All right, we'll have to leave it there for now. Krispy Kreme CEO Mike Tattersfield, good to see you. Good luck with the new location. You know what? Maybe I'll head down there soon with my mask on.
MIKE TATTERSFIELD: Really appreciate it, and thank you to all the Krispy Kremers. Thank you, guys.