New Krispy Kreme chief executive Nigel Glasby says the company must initially focus on letting customers know the chain is still open for business after it escaped from administration with the closing of 24 outlets.
Glasby, who has been appointed as chief executive, after previously filling the chief financial officer’s post, says the restructuring of the company that followed its fall into administration in late October has left the business on a much more stable footing.
On top of closing 24 stores the company cut more than 200 full-time, part-time and casual jobs. But the cutbacks – which leave Krispy Kreme with 35 outlets in operation – mean Glasby needs to do some work reassuring customers that the brand is not about to leave Australia.
“We are madly looking at what we can do in regards to marketing,” he told SmartCompany.
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“A lot depends on value we can get and of course availability.”
Glasby also admits the process of closing stores and cutting jobs has had an impact on morale and says one of his other key tasks is to ensure staff are refreshed and focused.
“Morale is down a little bit and that’s one of the big things we have to work on it. Mind you, we don’t have thousands of dollars to throw around – we’ve just come out of administration and it was for a reason.”
“It’s a matter of the key executives getting out there and talking with our people.”
The dramatic restructuring of Krispy Kreme has also provided some harsh lessons about the sort of sites the chain should pursue as part of any future expansion plans.
Many of the chain’s shopping mall outlets have been shut; Glasby says the high rents and high labour costs associated with these sites made them unprofitable.
Instead, Glasby is keen to build on Krispy Kreme’s wholesale business, which currently includes a deal to sell boxes of donuts through the BP service station chain. In another trial, Krispy Kreme has placed a donut cabinet in a Victorian ice-cream store.
Glasby says the trial with the ice-cream store has worked particularly well, with benefits for both parties.
“Their rent is already paid, their labour is already is paid, and they have a new product.”
In parallel to this wholesale strategy, Glasby wants to drive change within Krispy Kreme’s flagship stores, with improved customer service, a large range and other measures to boost customer experience.
Glasby believes this two-pronged strategy can be successful.
“We’ve always struggled with the customer saying ‘we want you to be special’ and then they turn around and say ‘I want you to be convenient’.”
“It’s certainly been a learning experience for Krispy Kreme, getting the right retail mix, particularly for the Australian market. In the US, most of their donuts are sold before 10am, where most of ours are sold after 4pm.”