Leveling Restaurant Traffic

WSJ.com – Dunkin’ Donuts Tries to Go Upscale, But Not Too Far

I haven’t seen one of these first hand, but the parent company of Dunkin’ Donuts has experimented with triple-branded restaurant buildings (a move they are backing down from).

I remember, when I was a kid, Little Caesar’s pizza combining with a bagel brand or going into the bagel business. The idea was to utilize pizza ovens in the AM by doing bagels. I think there was even a “bagel pizza” product, but I don’t remember the idea working out.

From a lean perspective, it sounds like classic leveling. With a restaurant, you have fixed capacity with a building, kitchen, parking lot etc. It’s not a good use of capital if that site is used only a few hours day. Hence the Dunkin-Togo-Baskin frankenstein sites:

“From 1997 to 2002, some Dunkin’ stores were moved under the same roof as two other brands owned by its parent company Allied Domecq, ice-cream-chain Baskin-Robbins and sandwich shop Togo’s. The idea was that each brand would draw customers at different times of the day: Dunkin’ for breakfast, Togo’s for lunch, Baskin-Robbins for late-day snacks. It didn’t work.”

There you go, classic leveling. Three brands, each designed to draw traffic to that fixed asset at different times during the day.

But, from a marketing standpoint, what an ugly building. It looks like a standalone food court, cluttered with three different logos. I can see where that might be a bit of a mess and confusing to customers.

There was an operational problem, too:

“franchisees complained it was too difficult to manage everything from slicing tomatoes to baking doughnuts to making milk shakes”

Who knows if that was really unworkable or if it was just a training issue, maybe with a lack of standard work.

Starbucks is working to utilize their fixed asset in a different way… extending their own brand to lunch (sandwiches) and afternoon (cheese and fruit trays). They are trying to expand their business, not just leveling the existing clientele across the day. I’ve also read about cases where Starbucks and a bank were sharing a building and a parking lot, since Starbucks is very busy before 9 AM, when the bank opens. I don’t think idea spread though.

Another thing from the WSJ article that made me think of lean was the cycle time goals for Dunkin’ and Starbucks:

They decided early on that Dunkin’ would keep its goal of moving customers through its cash register line in two minutes; Starbucks, by comparison, has a goal of three minutes. Dunkin’ customers said they didn’t want any changes in store design to result in longer waiting times.

Hooray to Dunkin’ Donuts for keeping the customer in mind, driving store design around their stated cycle time goal, rather than focusing on design first. I find it interesting that Starbucks’ customer time goal is slower than Dunkin’ Donuts. Is that because Starbucks is meant to be more relaxing? Ask that of folks in the long latte line at 7 AM. I wonder if the longer Starbucks goal is really customer driven or if that’s just the best they can do with their drink-making process?

Back to the home coffee pot.

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an eBook titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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2 Comments on "Leveling Restaurant Traffic"

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  1. Anonymous says:

    There are two main factors, do the brands fit and how well is the combo executed. Take a look at the Wendys/Tim Hortons pair. It is a good match with both being a little up scale from the competition and has been executed nicely.

  2. Rob, UK says:

    as for the 2 mins cycle time for Dunkin’ versus 3 mins for Starbuks, I would ask – how did they decide either time was ‘good’ from the customer’s perspective? It sounds like a standard or target to me. And what does a target become – it becomes a de-facto purpose – meet the target of 3 mins, rather than give the customer the experience they want. Targets always sub-optimise the system. What they should be working on is addressing their customer’s nominal value – for one customer it might be ‘take as long as you need, I’m taking a call’, for another it might be ‘I’m parked illegally, give me a coffee/donut right now’…….

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