Dunkin' Donuts Sales Up Sharply Despite Flat Fast-Serve Sector; Long-Term Plans Outlined.

RANDOLPH, Mass.--(BUSINESS WIRE)--Oct. 27, 1997--In sharp contrast to flat sales in much of the Quick Serve Restaurant (QSR) industry, Dunkin' Donuts announced today that its U.S. same-store sales grew 10 percent in the fiscal year most recently ended; during the last quarter of the year, the increase was even higher -- 16.4 percent over the preceding year.

In contrast, QSR same-store sales increases in general averaged only 0.6 percent last year, according to SalesTrac Weekly, a service of the NPD Foodservice Information Group, based in Rosemont, Illinois.

"The success of Dunkin' Donuts is due to this brand's ability to successfully change with the times and evolve to a new level," said Bob Rosenberg, the company's Chief Executive Officer. "That is why we are the largest retailer of coffee and baked goods in the world, why we became the largest bagel retailer in the U.S., and why we are growing in new ways that will make us the leading Quick Serve Restaurant chain in the world."

All critical Dunkin' Donuts sales indicators -- customer counts, average ticket prices -- showed significant increases in markets across the country throughout the year, according to company officials.

Customer counts were up 5.1 percent for the year, they said, and the average ticket price rose 4.8 percent.

According to Dunkin' Donuts CEO Rosenberg, the company's sales gains, which came on top of solid increases the preceding year, were the first results of a two-tiered near-term and long-range plan to re-position the brand for continued leadership in the 21st Century.

"We listen to our customers," Rosenberg said. "They've told us they want a Dunkin' Donuts that offers more choice and a great retail experience. We've been working hard to achieve that."

Sales, customer counts and average ticket prices started showing dramatic increases last January, when the company's rollout of its bagel business addition began, Rosenberg noted. Steep increases continued each week throughout the year, as stores in more areas began offering the bagels, and also in response to the company's new Coffee Coolatta, which brought in new and younger customers. Sales continued increasing over the summer, traditionally a slower period.

From January through the end of August, which is when the Dunkin' Donuts fiscal year ended, same-store sales increased 12.9 percent over the preceding year.

"The introduction of our freshly baked bagels this year amounted to an entire new business line that our franchisees enthusiastically embraced, retrofitting over 2,500 stores in less than a year," said Director of Franchising Douglas P. Fisher. "That seems to have paid off."

Ongoing introduction of new products and business-lines, offering customers more variety and bringing new and younger customers into the stores, are only the immediate aspects of the company's long-term plans, Rosenberg said. Both Dunkin' Donuts and Baskin-Robbins, which he also heads, are in the midst of re-positioning their brands to increase their emphasis on retailing and on an enhanced consumer experience. This will involve every aspect of their operations over the next few years. Both companies are owned by Allied Domecq PLC.

"Dunkin' Donuts and Baskin-Robbins have always made delicious products that customers love; now we're going to be America's best retailers as well," said Rosenberg.

More Dunkin' Donuts and Baskin-Robbins stores are integrating in co-branded locations, he noted, providing customers even greater choice, creating efficiencies, boosting sales and enhancing the companies' ability to compete for favorable locations.

Togo's Eateries, a high-quality sandwich chain recently purchased by Allied Domecq PLC, will also be integrated into the system over the next few years, providing still more choice for consumers and full daypart utilization for franchisees, he added.

Both Dunkin' Donuts and Baskin-Robbins have opened the first prototypes of new store models incorporating advanced operating systems, design features and amenities that reflect their increased retailing emphasis. These Dunkin' Donuts and Baskin-Robbins store models, referred to respectively as Next Generation and Store of the Future, will start rolling out this year and be phased into the system over the next few years, many in co-branded operations, Rosenberg said.

The ultimate goal is to position Dunkin' Donuts, Baskin-Robbins, and Togo's as the number one QSR concept in America, by creating a retail experience that preserves and expands the value of each of the three brands, while combining and transcending them, he said.

Dunkin' Donuts, based in Randolph, Mass., is the largest coffee and baked goods chain in the world, and has been providing its loyal customers with high quality coffee, bagels, donuts, and other related baked goods since 1950. With more than 4,700 combined locations in the United States and 35 countries around the world, Dunkin' Donuts has established a worldwide reputation for quality, freshness and convenience.

Since 1945, Glendale, Calif.-based Baskin-Robbins has created more than 700 different flavors. From its initial concept of an ice cream flavor for every day of the month, Baskin-Robbins has grown to become the world's largest retailer of frozen treats, with more than 4,400 stores. America's favorite ice cream maker offers a full range of treats from cones and sundaes to the popular line of Blast and Smoothie beverages to Celebration ice cream cakes for all occasions.

Togo's Eateries, a 203-store sandwich chain based in Campbell, Calif., was founded in 1971. The company is recognized for its fresh high-quality food, earning various "best sandwich" awards in many of its markets.

Allied Domecq PLC, the international spirits and retailing group, is a leader in the world's spirits market with a brand portfolio that includes Ballantine's whisky, Beefeater gin, Kahlua, Canadian Club, Sauza tequila and Courvoisier cognac. The group is also one of the largest international food and drink retailers, with some 3,900 United Kingdom pubs.

CONTACT: Jay Molishever

Nichol & Company

New York City 

212/889-6401

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