Krispy Kreme's 1st Philippine store ready to roll

BY PATRICIA DE LEON, GMANews.TV
Krispy Kreme, a popular doughnut store in the US, will open this week its first shop in the Philippines and is optimistic of good sales, despite unsavory struggles back in its homeland, a company official said on Monday. It will launch on Thursday its first store at The Fort, a former military camp which is now a high-end commercial district in the town of Taguig. Jim Fuentebella, chairman of The Real American Doughnut that brought the US franchise to the Philippines, was confident the product will sell despite being more expensive than local chain Go Nuts Donuts and fellow American shop Dunkin' Donuts. The cheapest variant of Krispy Kreme will sell at P30 each, triple the price of a regular Dunkin Donut. "I'll be the first one to tell you, it's expensive. But we believe in the brand. We believe that the Filipino will embrace all of this. At the end of the day, there's so much potential," Fuentebella told reporters at the product launch. Popular for its hot, soft and sugar-glazed doughnuts, Krispy Kreme was founded in 1937 in North Carolina. It began expanding to overseas in 2001, setting up its first store outside the US in Canada. Krispy Kreme, which is listed on the New York Stock Exchange, now has 100 stores outside of the United States. After a hot initial public offering in 2001, the company struggled with restatements, a U.S. SEC investigation into past accounting, and a decline in doughnut sales that sent some of its franchisees into bankruptcy. The company blamed tough competition and a consumer shift to a healthier diet for the poor sales. High-end market Fuentebella, who also sits as managing director of Max's Restaurant, said Krispy Kreme in the Philippines will be targeting middle to high-end customers. "This doughnut in the United Kingdom, costs roughly about P75. If you buy it in San Francisco, it's P55 pesos. The doughnut here is at P22 and that's freshly made in the Philippines," said Fuentebella. The second Krispy Kreme store will open next month in Megamall. Fuentebella said his group will spend at least $29 million over the next five years to put up 29 more Krispy Kreme shops in the Philippines. Krispy Kreme senior vice president for international operations Jeff Welch said he was bullish about expanding in the Philippines, with eating a part of the country's culture. "In most countries in Asia, food is part of the culture. Eating is a social event. We've also seen that the Filipino people like sweets," Welch said. Welch said they also found a perfect partner in the Max's group. "We had to make sure that we had the support staff in place and we wanted to make sure that we had the right franchisee and the Max's people fit that description," Welch said. - GMANews.TV