OPERATIONS

Dunkin Donuts switching focus to beverages

BY Dan Berthiaume

Canton, Mass. — As part of a brand overhaul, Dunkin’ Donuts is switching its focus from doughnuts and baked goods to coffee and other beverages. At this week’s annual consumer conference hosted by investment banking firm Jeffries, Paul Carbone, CFO of parent company Dunkin’ Brands Group, said beverages accounted for 58% of sales at U.S. franchise locations last year.

“We are a beverage company,” Carbone said. “Fred the Baker is not coming back.”

Dunkin’ Donuts seeks to double its current U.S. store count to 15,000 in the next few years. Much of this expansion will take place in the western U.S., where Starbucks dominates, with California as a major target. The retailer expects to start opening stores in California in 2015. A new national media campaign will emphasize beverages rather than food.

Dunkin’ Donuts has also been recently rolling out “café-style” store redesign that includes a new, earth-toned palette, to make its locations resemble those of rival Starbucks, according to Bloomberg. The retailer has opened 90 remodeled stores to date, according to the report, and plans to open about 600 by the end of this year.

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OPERATIONS

Ross Stores pays $3.9 million fine for defective kids’ clothing

BY Dan Berthiaume

Pleasanton, Calif. — Ross Stores has agreed to pay a $3.9 million fine to the Consumer Product Safety Commission (CPSC) for neglecting to inform the commission within a mandated 24-hour period that it sold or stocked in stores roughly 23,000 pieces of children’s apparel with drawstrings located at the neck or waist between January 2009 and February 2012. Sales of children’s clothing with these types of drawstrings has been officially banned in the U.S. since 2011 and subject to voluntary restrictions since 1996.

As part of the fine agreement, Ross Stores will create a compliance plan to prevent future sales of defective children’s apparel but denies intentionally violating any regulations. Ross Stores previously paid a $500,000 fine in 2009 for selling defective children’s clothing during 2006 and 2007. Neither the CPSC or Ross Stores website had any information or comment on this matter.

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Dollar Tree shareholders re-elect directors

BY CSA STAFF

Chesapeake, Va. – Shareholders of Dollar Tree re-elected 11 members of the board of directors at the company’s annual meeting on June 20. Arnold S. Barron, Macon F. Brock, Jr., Mary Anne Citrino, H. Ray Compton, Conrad M. Hall, Lemuel E. Lewis, J. Douglas Perry, Bob Sasser, Thomas A. Saunders III, Thomas E. Whiddon, and Carl P. Zeithaml each received a majority of votes to serve another term on the board of directors.

In addition, shareholders approved the company’s 2013 director deferred compensation plan; ratified the selection of KPMG as the company’s independent registered public accounting firm; approved management’s proposal to increase authorized shares of the company’s common stock; and passed a proposal to approve, on an advisory basis, the compensation of the company’s named executive officers. Each of these proposals received a majority of votes cast at the meeting.

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