Digital Innovations Prove Successful for Restaurants

Krispy Kreme looks to launch dark stores for e-commerce only, while Cracker Barrel and Papa John’s see digital success.

February 28, 2022

Krispy Kreme Doughnut Box

CHARLOTTE, N.C.—Krispy Kreme plans to launch dark shops for its doughnuts, reports Food Business News. These low-cost delivery points would be accessible to e-commerce delivery drivers only.

The dark shops were tested in the U.K. last year and were successful, with more than 50 delivery-only dark shops expanding consumer access to fresh donuts. Krispy Kreme plans on bringing the concept to U.S. and Mexico markets in 2022, following customer feedback that freshness is a key factor in sweet treat purchasing decisions.

“Our dark shops will piggyback on existing spoke routes, which ensures a fresh donut distribution daily and opens up further access to more customers,” said Michael J. Tattersfield, president and chief executive officer of Krispy Kreme, on a fourth-quarter earnings call. “We believe these initiatives will generate double-digit organic revenue growth this year.”

Krispy Kreme purchased Insomnia Cookies in 2018, which is a late-night fresh cookie delivery business that operates out of retail storefronts, and Krispy Kreme has seen promising growth in the e-commerce sector since the acquisition. Revenue for Insomnia rose more than 30% overall and nearly 20% excluding new store revenue.

Tattersfield said that Krispy Kreme hopes to capitalize on the appeal of freshness and convenience delivered directly to customers within a 20-minute range of a dark shop.

Meanwhile, Cracker Barrel is expanding its virtual brand The Pancake Kitchen to 200 locations by the end of 2022, roughly doubling the count from the start of the year, reports Nation’s Restaurant News. The Pancake Kitchen is delivery only and cooked in Cracker Barrel’s kitchens.

“The expansion of The Pancake Kitchen by Cracker Barrel is part of our plan to make it as easy and convenient as possible for guests to enjoy one of our most popular homestyle breakfast favorites,” said Matthew Schaefer, Cracker Barrel’s senior director of strategy and innovation, in a statement. “As the trend in online ordering and partnership with on-demand delivery platforms continues, we are excited to evolve our strategy and offerings to ensure our guests are able to satisfy their cravings for ‘pancakes all flippin’ day.’”

In an earnings call, Cracker Barrel CEO Sandy Cochran said the company is “confident that we can retain at least 60% of the growth in off-premises sales that we experienced during the pandemic.”

The Pancake Kitchen’s menu consists of buttermilk pancakes with flavors like pecan, blueberry, confetti (fruity cereal) and chocolate chip, with the option to add Cracker Barrel sides such as loaded hashbrown casserole or fried apples.

Same-store sales for Papa John’s in the fourth quarter were up 11.1%, and much of those sales were from its digital business, according to CEO Rob Lynch. Digital sales saw double-digit growth for the second consecutive year in a row, and now 90-95% of orders come through digital channels. A significant amount of the digital orders is from loyalty program growth, which increased its membership by six million to 23 million by the end of 2021.