Krispy Kreme to launch delivery-only ‘dark shops’

Krispy Kreme to launch delivery-only ‘dark shops’

CHARLOTTE, NC. — In a fourth-quarter earnings call Feb. 22, Krispy Kreme, Inc. executives discussed the expansion of “dark shops,” or low-cost delivery points for donuts and sweet treats. Following the company’s “hub-and-spoke” model, where large regional bakeries stock products in smaller retail distribution outlets, the dark shops will act as delivery points for the baked foods, requiring lower operating costs than a traditional retail location and accessible only to e-commerce delivery drivers.

The concept was piloted successfully last year in the United Kingdom, with more than 50 delivery-only dark shops expanding consumer access to fresh donuts. Krispy Kreme plans on bringing the concept to US and Mexico markets in 2022, following customer feedback that freshness is a key factor in sweet treat purchasing decisions.  

“Our dark shops will piggyback on existing spoke routes, which ensures a fresh donut distribution daily and opens up further access to more customers,” said Michael J. Tattersfield, president and chief executive officer of Krispy Kreme. “We believe these initiatives will generate double-digit organic revenue growth this year.”

Krispy Kreme has seen promising growth in the e-commerce sector since the 2018 acquisition of Insomnia Cookies, a late-night fresh cookie delivery business that operates out of retail storefronts. Total revenue for Insomnia Cookies in 2021 increased by more than 30% overall and nearly 20% excluding new store revenue, said Mr. Tattersfield. With the promising success of Insomnia’s delivery-centric model, Krispy Kreme hopes to capitalize on the appeal of freshness and convenience delivered directly to customers within a 20-minute range of a dark shop.