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This Beloved Coffee Chain Just Closed 687 Locations For Good

By the end of the year, America's favorite coffee chain will have shuttered 8% of its total U.S. stores.
Dunkin donuts coffee cup and doughnut

As part of a "real estate portfolio rationalization," Dunkin' announced back in July 2020 that the Massachusetts-based coffee chain would be closing 800 locations by the end of the year. (While that sounds like a lot, those 800 locations only account for approximately 8 percent of the chain's U.S. total restaurants.) In its third-quarter earnings report released on October 29th, Dunkin' confirmed that it had officially closed a total of 687 locations—permanently.

(Related: 8 Grocery Items That May Soon Be in Short Supply.)

A significant portion of these locations—447 of them—were Dunkin' outposts in Speedway gas station convenience stores. The company reached an agreement with Speedway earlier this year to close the locations since they have lower volumes and limited menus, claiming the markets would be better served by full-scale locations.

Dunkin' explains that the decision to shutter the additional 240 stores wasn't attributed to COVID-19, as has been the case with thousands of restaurants and restaurant chains. Rather, it was purely due to the fact that they were low-volume sales locations that only represented 2% of its U.S. sales as of 2019.

"We are nearly complete with our initiative, as announced last quarter, to work with our franchisees to close low-volume, under-performing locations following our quality-over-quantity development philosophy," said Kate Jaspon, Chief Financial Officer, Dunkin' Brands Group, Inc. in a press release. "For many Dunkin' U.S. franchisees, closing these restaurants will enable them to do greater reinvestment into the brand whether through Next Generation remodels, building new restaurants, or relocating restaurants to higher-traffic areas."

Although Dunkin's same-store sales plummeted 18.7% in the second quarter during the onset of the coronavirus, the coffee chain has recovered in the months since. After restaurants gradually were able to open dine-in locations, Dunkin' recovered to a growth of 0.9% in the third quarter with approximately 98% of Dunkin' U.S. locations fully open again.

While Dunkin' is losing these underperforming locations, the chain is still growing and improving. The company opened 221 new locations during the same time period and has plans to add more drive-thrus. According to Scott Murphy, president of Dunkin' Americas, locations with drive-thru formats performed significantly better than units without the channel since the start of the COVID-19 crisis, as reported by Restaurant Business. That's why Dunkin' is on our list of 6 Fast-Food Drive-Thrus You'll Be Seeing Everywhere Soon.

For even more ways your favorite coffee chain has been evolving amid the pandemic, don't miss these 5 Major Changes You'll See At Dunkin'.

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Olivia Tarantino
Olivia Tarantino is a senior editor of Eat This, Not That!, specializing in nutrition, health, and food product coverage. Read more
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