US doughnut and coffee chain Krispy Kreme will open its first UAE outlet in the Deira City Centre shopping mall tomorrow, the first of seven stores planned for the country this year.
The North-Carolina-based food company, which is listed on the New York Stock Exchange, aims to roll out 100 stores throughout the Middle East in the next five years.
The move follows a regionwide partnership agreement with Kuwait-based Americana Group, which owns franchise rights to fast food chains KFC, Pizza Hut, Hardee’s and TGI Friday’s.
Krispy Kreme has been operational in Kuwait since fourth quarter 2006, where sales hit approximately Dh31,700 in the first three months - a benchmark for the Dubai store, according to Americana Group officials.
However, retail analysts say the chain might struggle to take UAE market share from competitors Dunkin’ Donuts and Starbucks unless it perfects its business model.”I think the market will absorb the brand and there is undoubtedly available capacity with all the retail space coming up, but they didn’t really penetrate the sophisticated UK retail market, which is a concern,” said an industry analyst.
Well known for its traditional glazed doughnuts, Krispy Kreme enjoyed wild success in the US following its IPO in 2000.
However, analysts say the company expanded its store count too quickly, leading to several bank-ruptcies among its franchise partners and numerous store closures. It was also hit by an inquiry into its accounting practices.
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