A U.S. labor shortage poses a challenge to Dunkin’ Brands (NASDAQ:DNKN) as it plans to add about 1,000 new stores in the U.S. by the end of 2020.
The company struggles to find qualified workers to fill positions at its 8,500 locations across the country, according to Nigel Travis, who has been at the helm of the company since 2009. He commented during the company’s investor day Thursday morning.
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“The biggest concern I have is the labor shortage in this country,” he said. “The overall lack of people is worrisome.”
Dunkin’ Brands’ stock rallied 65 cents, or 1.1%, to $59.51.
Another barrier for the donut chain’s growth despite reporting better-than-expected fourth-quarter sales earlier this month is the “Amazon effect” on retail.
The former Blockbuster executive said he is all too familiar with the type of disruptions that devastated the video rental company, which has prompted him to become aggressive in one-on-one marketing, updating the company’s app and testing catering and delivery options.
On Thursday, the Canton, Massachusetts-based company announced its “blueprint for growth,” which is a three-year strategic plan for expanding revenue.
The plan will emphasize menu innovation, convenience and accessibility for its coffee drinkers. Its financial target for 2020 is 3% growth.
“I’m obsessed with comps,” Travis said. “My mood changes as a result of it.”
He said the company returned $2 billion to shareholders since its initial public offering.
The company said it plans to rely on franchising to reach its goal of 18,000 U.S. stores.
Over the past year, Dunkin’ has increased digital ordering and slimming down its menu to refocus its efforts on being a beverage-led brand.
Earlier this month, the company announced that it is shifting its strategy to increase sales after the morning rush, a strategy that its main competitor Starbucks is also pursuing. Both chains have offered multiple promotions later in the day to bring customers back.
The chain is also working on being more environmentally aware. On Wednesday, it announced that it’s officially ditching its iconic foam cups and switching to paper ones.
Karen Raskopf, chief communications and sustainability officer for the company, said the move to improve it packaging was critical not only for its customers but for the planet.
As far as competition is heating up with retailers such as McDonald’s, Burger King and Starbucks nipping at its heels, Travis said it’s something that he thrives off of.
“Twice in my life, I have been fighting with McDonald’s and I’ve spent nine years fighting with Starbucks,” he said. “That’s what makes us better.”