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Loading ...Are you kidding? Like Wall Street, truth is stranger than fiction. USA Today detailed how Krispy Kreme has been trying to revive its sales for nearly three years, amid a health craze that made its warm glazed doughnuts an indulgence that many just couldn’t stomach. Now industry watchers say Krispy Kreme Doughnuts’ latest turnaround plan includes selling ice cream with a topping bar. Are you kidding? The company sees its products as “an affordable indulgence” and one of “many sweet treats available to consumers worldwide.”
Sales at stores open at least a year, dropped 6.5% in the six months ended Aug. 3. And that’s their money months!
This is like Kmart buying Sears – two troubled concepts holding on but unable to climb out of the whole they are in due to short-sighted company officers.
Earlier in this decade, Cold Stone Creamery was one of the hottest franchises around. The super-premium ice-cream stores attracted scores of franchisees hungry for a piece of the “Ultimate Ice Cream Experience.” Now many franchisees are selling their stores, overwhelmed by soaring bills and shrinking profits. Some have lost their homes, broken their retirement nest eggs or filed for bankruptcy. One list on a Cold Stone Web site recently had 303 stores for sale — more than 20% of the company’s 1,384 as of last December.
They too found having one product daunting to build a year-round profitable business on. Not to mention the fact local and state governments are legislating transparency in calories and ingredient labeling. The trend is healthier eating – not even more of the same fat and calories in another form.
KK made their money on selling in bulk, they didn’t care for onesy-twosy sales, they wanted dozens of boxes to go out the door – that’s how their business model was based. It was a donut factory that had to work overtime to turn a profit. Once the bloom was off the rose with KK donuts available at every Qwikie Mart in the country – cold and fairly bland, their fabulous PR and unique selling proposition were gone. A stock that was once $50 a share is now in the $2 range.
The lesson to business owners everywhere is simple. When your market has moved or changed, change with them but don’t do more of the same. (Remember Lehman Brothers last October boasted they were buying even more of the junk loans that were troublesome – now who’s boasting?)
True leaders find where they should be going forward, not grasping at cones.
