Shareholders Sue Krispy Kreme, Say Misled About Strategy

krispykremeSure Krispy Kreme makes great doughnuts, but for me the real treat was going into one of their shops for the first time. I was visiting friends in Davenport, Iowa and after a hockey game we went to Krispy Kreme at midnight. The place was packed. I was fascinated by the Seussian doughnut-making contraption and the lunchbox sized coffee containers. Oh, and the doughnuts. Never better than when they’re hot, right out of that grease river and the frosting waterfall.

That’s the free prize. The experience of taking a glimpse into a Wonka-esque factory turning out delicious sweets. A few months later, I was in Austin, Texas with my family and there was a Krispy Kreme a few blocks from the hotel. We went. We watched. We ate them there. We took them back to the hotel. The next day I noticed that there were boxes of Krispy Kreme doughnuts for sale at Albertsons, just across the street from the Krispy Kreme shop. They were also at every c-store for miles around. Then, I came across kids selling them as a fund-raiser 100 miles from the nearest store. I thought to myself, why would I pay for the donuts without getting the experience?

The suits may blame the low-carb craze, but I think they strayed from their core brand enough to become a commodity item. At a time when they should have pulled back into their own stores and reinforced the experience of the brand, they convinced themselves that the donuts were the experience. Wrong. The donuts are, after all, just donuts.

As to their shareholders suing them. I think we Americans are awfully quick to want to blame somebody for any loss we might experience. Did the company really lie to the shareholders, or were they also lying to themselves?

Meanwhile, Dunkin Donuts seems to realize that they can build on their own customer experience factor simply by providing above-average coffee. Hmmm. – Business – Shareholders Sue Krispy Kreme, Say Misled About Strategy

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