Why Krispy Kreme hasn’t conquered Australia: Aussies refusing to eat doughnuts for BREAKFAST blamed for 35 stores closing
- A US YouTube channel has explained why the US franchise failed Down Under
- The video claimed Krispy Kreme opened too many stores compared to demand
- It has also been reported that Australians saw the doughnut chain as a novelty
- The company went into administration and closed 35 out of 50 stores in 2010
Health-crazed consumers have been blamed for the failure of popular doughnut chain Krispy Kreme to conquer the Australian market.
A video by YouTube channel Cheddar on Tuesday featuring an examination of why the US-based franchise has been unable to dominate Australia’s doughnut market.
Krispy Kreme opened too many stores to suit the demand in a country where people followed a ‘low-carb fad that permeated diet culture in the late 2000s’, the video claimed.
A video appeared on YouTube channel Cheddar on Tuesday featuring an ‘examination’ of why the US-based franchise ‘failed down under’ post 2009 (stock image)
‘Australians don’t want to eat doughnuts everyday. In Australia, doughnuts are a treat, not breakfast,’ the video claims.
‘That’s because of increasingly health-conscious Australians.’
The video was based on data showing Australians consume fewer doughnuts than Americans, and that Krispy Kreme simply opened too many stores to than was needed to satisfy a comparatively small demand.
The video also stated that at the height of the doughnut giant’s success in 2009, Australian stores increased their revenue by 6.9 per cent.
But the rapid expansion across the country meant net profit margins were only up 0.01 per cent in the same year.
That left Australia with one store for every 420,000 people, compared to the US which had one store for every 1.4 million people.
Krispy Kreme’s immense popularity in 2003 when Australia’s first store opened in Penrith was largely due to the franchise being seen as more of a passing novelty, ABC News reported.
It was also reported that selling the doughnuts by the dozen meant consumers bought them for special events, rather than buying them as everyday snacks.
‘Several factors, including location, sales declines, high rents and high distribution costs, have meant that a number of stores are losing money,’ said Krispy Kreme Australia CEO John McGuigan.
The company went into administration in 2010, prompting the closure of 35 out of 50 stores.
Krispy Kreme doughnuts are still sold in the remaining Australian stores, and in 7-Eleven stores across the country.
It was suggested that Krispy Kreme’s immense popularity in 2003 when Australia’s first store opened in Penrith (pictured) was largely due to the franchise being seen as more of a passing novelty