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Nigel Travis, chief executive of Dunkin' Brands Group Inc, told
Reuters he expected some Starbucks customers to be angered by
the move, creating an opportunity for his company's doughnut and
coffee shops to win them over.
"We feel excited about the change to Starbucks' loyalty
program," he said in an interview during a trip to Frankfurt.
"We've been targeting customers with $5 gift cards," he added,
while declining to quantify the possible impact on the Dunkin'
Donuts business.
Under Starbucks' previous rewards program, customers earned
redeemable points for every purchase, whereas the new program
awards points for every dollar spent, putting customers who buy
cheaper items at a disadvantage.
Maxim Group analyst Stephen Anderson said after Starbucks'
announcement last month that its customers would have to spend
$62.50 to receive their first beverage reward, compared with $40
under Dunkin' Donuts' loyalty program.
He estimates customer defections from Starbucks could add
roughly 0.25 to 0.4 percentage points to sales growth at Dunkin'
Donuts, excluding new outlets.
That would be a welcome boost for Dunkin' Donuts, which saw
same-store sales in the United States slip by 0.8 percent last
quarter, as the launch of all-day breakfast by McDonald's
and value-meal offers by rivals lured customers away.
British-born Travis, who previously held executive positions at
video rental chain Blockbuster and pizza group Papa John's, also
said his group was eyeing growth in Europe.
The Canton, Massachusetts-based company added a net 55 Dunkin'
Donuts franchise stores across Europe in 2015, bringing the
total there to 221.
In Germany, where it has 70 outlets, Dunkin' aims to add about
20 a year, said Travis, who drinks seven cups of coffee a day.
He also said he was confident Dunkin' could make its business in
Britain work, where it has had a rough start after announcing in
2013 a return to the market nearly two decades after exiting.
(Editing by Mark Potter)
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