Ben Affleck’s favourite coffee spot is coming back to Canada.
Driving the news: Coffee and doughnut peddler Dunkin’ is re-entering Canada, with franchisor Foodtastic striking a deal with the chain’s owner, Inspire Brands, to develop the brand here. It plans to open hundreds of locations starting either late this year or early next.
Dunkin’ used to have Canadian locations, with a strong presence in Quebec, where it once boasted more than 200 stores. However, it struggled against stiff competition — and later, franchisor lawsuits — with the last three spots shuttering in 2018.
Zoom out: The expansion comes at a bumpy time for Canada’s quick-service restaurant sector (industry speak for fast food), which appears to be the victim of the K-shaped economy. A recent Restaurants Canada survey found that year-over-year sales at quick-service joints fell 2% in January, making it the worst-performing restaurant segment.
Why it matters: The return of Dunkin’ will be an interesting test of Canadian market factors. Is there enough room in an already crowded coffee and doughnut space dominated by Tims, which just announced expansion plans? Also, will Elbows Up sentiments be a hindrance?
U.S. boycotts haven’t really hurt other American chains expanding here, but many Canadians are patriotic about where they get their morning brews, and Dunkin’ is a particularly U.S.-coded brand — its slogan is literally “America runs on Dunkin’”
Our take: We predict that the novelty factor will lead to strong early numbers for Dunkin’ (especially from the crowd that loves to complain about how Tims has gone downhill). That said, we also foresee a long-term struggle muscling in on already-spoken-for territory.—QH
