Pouring more cups of "joe" for the average Joe while avoiding bumping into the Big Guy.
That's the simplified growth strategy at Dunkin' Donuts, the flagship chain at Allied Domecq PLC's (AED) franchised food business, Dunkin' Brands Inc., as it charts U.S. expansion.
"I don't know that we want to compete with Starbucks (SBUX). We just want to share a space with the coffee consumer," said Dunkin' Brands Chief Executive Jon Luther Monday. "We're about mainstream. We're for the average Joe."
But sharing that space without conflict may be tough to do. Starbucks plans to add more than 1,000 domestic outlets in fiscal 2005. It already has about 6,100 U.S. retail outlets compared with 4,400 for Dunkin' Donuts.
McDonald's Corp. (MCD) is likely to heat up the coffee wars by promoting premium coffee at breakfast, beginning early next year. Also, the Tim Horton's coffee shop chain owned by Wendy's International Inc. (WEN), is expanding into the Northeast just as Dunkin' Donuts makes a push to fill out markets there.
Dunkin' Donuts' plans call for it eventually to go West - only about 70 of its outlets are west of the Mississippi. Cincinnati is slated for a big push soon with Pittsburgh "on the list for consideration," Luther said. It recently increased its penetration of the Atlanta, Cleveland and Charlotte, N.C., markets.