Glazed & Confused | For independent doughnut shops, competing against Dunkin' Donuts is no easy task
Coffee Talk
Sandra McAneany (left), manager at Morningside Donuts of Fitchburg says the shop has yet to turn a profit. Many independent doughnut shops like the Donut CafÃ&Copy; (bottom left) and In House Coffee (bottom center) have a hard time competing against the franchise chains of Canton-based Dunkin' Donuts (bottom right).
Sandra McAneany (top), is the manager at Morningside Donuts of Fitchburg, which has yet to turn a profit. Many independent doughnut shops like the Donut Cafe (bottom left) and In House Coffee (bottom center) have a hard time competing against the franchise chains of Canton-based Dunkin' Donuts (bottom right).
By 8:30 a.m. on a chilly Thursday morning in December, the Morningside Donuts shop in Fitchburg is filling up. Only one of the shop’s eight, navy blue-colored booths lining the walls remains empty. Mothers with young children in tow and police officers who left their cruisers idling in the parking lot are moseying up to the counter to get their morning caffeine fixes, and the shop’s drive-thru window is seeing its own steady flow of traffic. The shop is filled with laugher and boisterous conversation as the regulars catch up and shoot the breeze.
It’s plenty of business to keep the shop’s manager, Sandra McAneany, and her co-worker Kalie Clayton hustling from station to station.
“When we get busy, between the counter, the drive-thru and the restaurant, we’re running,” McAneany said. Yet, the Morningside Donuts shop serves as an example that appearances can be deceiving. The shop’s owner, David Howard, who took over ownership in January 2009, says that after almost a year, he’s yet to turn a profit.
“We’re barely able to stay afloat,” he said. “We’ve made just enough to sustain the business, but there’s no profit.”
The shop is a family-owned business, with Howard’s mother-in-law and two sisters-in-law on staff full-time.
“It keeps my family employed and it keeps us together, which is good,” he said. “But if we start losing money then our business isn’t going to make it. You can only lose money for so long.”
Challenging Corporate America
Such is not a concern for Dunkin’ Donuts.
With more than 6,300 shops located in 34 states across the country, it’s hard to argue with the slogan that “America runs on Dunkin’.”
The coffee and doughnut chain, which opened its first store in Quincy in 1950, has since grown exponentially thanks to an aggressive franchise strategy. And its growth hasn’t been limited to the United States. It has more than 2,400 locations in 31 countries, from Peru to China, New Zealand to Saudi Arabia.
Inventory sales for the company are as staggering as its number of locations. The corporation sells 2.5 million doughnuts everyday and more than 1 billion cups of coffee in a given year.
With Dunkin’ Donuts’ global sales peaking at $5.5 billion in 2008, it’s an achievement that there are any local, independent coffee and doughnut shops in existence in the shadow of the D&D headquarters at all. How the mom and pop shops manage to compete, however, is another matter entirely.
Making The Dough In Doughnuts
Sixty-four-year-old Robert Sbrogna, who owns Donut Café and Donut Café II in Worcester, can say without any exaggeration that he’s devoted his life to doughnuts.
Sbrogna’s doughnut career began when he was 15 years old, washing dishes at Cottage Doughnut, a local chain that once had locations in Worcester, Marlborough and Westborough, among others, though now many of those locations exist as Dunkin’ Donuts stores.
Within a year he was making the doughnuts himself and eventually climbed the ranks to be a store manager. Twenty-five years ago he struck out on his own and opened Donut Café on Shrewsbury Street and opened a second shop seven years later on the corner of Chandler and June Streets.
He says that history, and the fact that he continues to make doughnuts the way Cottage Doughnut did 30 years ago, helps draw in business.
“Nothing is better than word of mouth,” he said of his business’ primary source of advertising. “That’s how I got people.”
He relies on the quality of his products to compete with Dunkin’ Donuts, though he said it’s not an easy fight.
“You can make enough money to be comfortable if you don’t mind working yourself seven days a week,” he said. “You have to live at your business to get it off the ground.”
Not So Great Expectations
That’s just what Yasser “John” Aldarawcheh and his wife, Yuliya, are doing at In House Coffee on Shrewsbury Street.
The couple opened their shop in March 2009 and since have put in long days, working from the early morning hours (6:30 during the week and 7 and 8 on the weekends) until 11 at night. Surprisingly, Aldarawcheh, who previously owned Gourmet Donuts on Park Avenue in Worcester, intentionally chose to open up shop only two-tenths of a mile from a Dunkin’ Donuts.
“People get tired of Dunkin’ Donuts on every corner,” he said. “I’m trying to provide better coffee, better service, so people can compare.”
The 38-year-old native of the Middle Eastern country of Syria doesn’t like to think of Dunkin’ Donuts as his competition; he’d rather put his business in the same category as Starbucks.
But regardless of who he aims to compete against, he’s incorporating specific products to his menu — crepes, chocolate-covered fruit and Turkish coffee — precisely because no other business in the area is offering them.
Like Donut Café, all of In House Coffee business is generated by word of mouth, which Aldarawcheh says has exceeded his expectations to this point. He also says that he knows it will take him a while to make a profit, but for now that’s a reality he can live with.
“[I’m making] enough to pay my bills, and that’s very good for a new business,” he said.
The Waiting Game
Back in Fitchburg at Morningside Donuts, David Howard is less content with barely getting by.
“We’re really struggling right now to survive,” he said, “but we’re trying to hang in there and wait for the economy to turn.”
Like In House Coffee, Howard has incorporated unique aspects to his business that he hopes will differentiate it from the crowd, and certainly from Dunkin’ Donuts.
For starters, the shop offers all three options to customers: ordering at the counter, using the drive-thru or being waited on at one of the tables. And then there’s the lunch menu, which offers everything from burgers and grilled sandwiches to homemade soups and salads.
“Dunkin’ Donuts is a staple of the world and the McDonalds, Burger Kings, you’re never going to take those guys away,” he said. “The task for somebody like me is to do something to separate myself from them.”
With no advertising budget, Howard is resigned to typing up flyers and placing them on car windshields or posting them in public areas, and generally hoping that word continues to circulate about his shop.
“We’ve only had the place for a year and people still don’t know about it, so we have to get the word out,” he said. “I don’t know when the economy is supposed to start getting better, but hopefully after the holidays people will start coming back out.”
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