Doughnut Shop

This may not be a question you ask yourself everyday but it is an interesting question. This not only applies to any kind of store that you might think of locating. There is an old saying in real estate that the key to a stores success is location, location, location. The point is that you have to locate your store in the right place to hope to succeed.

Our case is about a Krispy Kreme Doughnut store. Each store needs bakery and retail space of 4,500 square feet. The store has to have room for a 39 foot long doughnut machine, as well as counters, tables and staff of 150. The store also needs one acre of parking of the thousands of customers who visit the store each day.

A key to the success of the store is the population base (number people in the area). Krispy Kreme wants 100,000 households with a short drive of each store, a number that equates to about 310,000 people (there are more then one person per household).

Convenience is key to the location. People will not drive out of their way to grab a coffee and doughnut.

To find the perfect location, Krispy Kreme looked at census data (reports on population by area) and drew big circles of 100,000 households. They cross out areas that are too expensive or areas that do not have the appropriate land available.

Their planned sites tend to be in suburbs and usually based in regional malls with easy access to major highways.

There are other more sophisticated ways of figuring out locations. Satellites and aerial photos can also be used. Information can be handed over to demographic consultants who use computers to solve the problem.

Consensus information can be mixed with a host of other information and connected to postal codes/zip codes to pin the information down to the nearest building or street block. The demographers use credit card records, magazine subscriptions, drivers licenses and other information that is available on just about everyone in a city. The information comes from applications forms, questionnaires and surveys.

Given all this information and the process they take, it can be determined how many doughnuts they expect to sell at a location. Armed with this information they are ready to pick their location.

There is lots to think about before you choose your store location!