The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.
NEW YORK ( Trefis) -- Dunkin' Brands (DNKN) is a franchisor of quick service restaurants and operates globally through Dunkin' Donuts and Baskin-Robbins brand names. Dunkin' Donuts offers varied products including coffee, donuts, muffins, bagels, and breakfast sandwiches, among others, whereas Baskin-Robbins is a global chain of ice cream parlors.
At present, Dunkin' Donuts' U.S. segment contributes the most to Dunkin's revenues, with approximately 70% share of gross revenues. Going forward, we believe its contribution would decline slightly and Baskin-Robbins International would emerge as the key driver for growth. Dunkin' Brands competes with McDonald's (MCD), Starbucks (SBUX), Krispy Kreme, Dairy Queen and Cold Stone Creamery among others.
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Dwindling consumer discretionary spendingVolatile economic conditions are directly affecting the fast food industry. The impending euro crisis, sluggish U.S. economic recovery and high unemployment rates are affecting disposable incomes worldwide.
Higher cost pressures troubling food and beverage sectorRising inflation has significantly increased costs for food and beverage companies. Many of the firms have increased the prices of their offerings to fight inflation. However, continued inflationary pressures could significantly affect growth prospects.
Shift in Ice Cream Consumption in U.S.The ice cream industry in the U.S. is shrinking gradually. A trend toward home consumption is growing and sales at ice cream parlors are declining. Baskin-Robbins is gradually closing down its franchises in the U.S. and expects the trend to continue in the coming years. Click here to find out how a company's products impact its stock price at Trefis. Like our charts? Embed them in your own posts using the Trefis Wordpress Plugin.
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