Krispy Kreme CEO Mike Tattersfield, isn’t overly worried. Instead he sees the flagship store, opening September 15, as just one part of the brand’s growing “doughnut ecosystem” in the city.
“We were thinking about how to manage a mile-long line to enter, but we won’t be facing that today,” he admitted in an interview with CNN Business. “It’s still resilient to unlock new channels of growth,” he said, including delivery that it launched nationwide in late February.
Tattersfield said it’s controlling capacity for social distancing with online reservations to enter the store if it becomes too crowded. Employees will also wear masks and have daily temperature checks. The September opening is more than four months after an originally scheduled May launch date, which was scuttled because of the virus.
The number of average daily visitors to the 10-block Times Square area is increasing slowly from its April low, when it declined 91% compared to the same month a year ago, according to the Times Square Alliance. In July, the visitor count was down 83% compared to 2019.
Perhaps more concerning, at the intersection where Krispy Kreme is located — 48th St. and Broadway — visitor count was down 90% year-over-year for July, showing little improvement from April when it was down 96%.
With numbers like that, Neil Saunders, managing director at advisory firm GlobalData Retail, doesn’t predict a sweet future — at least in the near term.
“Under normal circumstances, a Times Square store would be a magnet for customers, especially tourists,” he told CNN Business. “But these are not normal times: Foot traffic has been decimated, tourism has dried up and both of those things mean that stores will be operating well below their potential.”
He added that a “case could be made” that the location could eventually become a standout for Krispy Kreme. “But there is still a huge question mark over if and when things will get back to normal,” Saunders said.
Tattersfield said stats like that mean it won’t meet sales projections it had originally planned, but it doesn’t mean Krispy Kreme is giving up on the location that was three years in the making.
“We anticipate this will be a pretty long build for us, with more than one-year plus to get to volumes that we anticipated,” he said. “It’s an opportunity for us to grow and look at our other channels that want access, but don’t have enough access in New York City.”
Tattersfield described Krispy Kreme as a “branded doughnut company” rather than just being focused on its restaurants. “It’s about creating the right access to doughnuts, whether it’s hot or fresh and doing that through delivery, wholesale or extended shelf life products.”