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Is Foot Traffic Growth Key To Inspire Brands' Interest In Dunkin'?

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Is Foot Traffic Growth Key To Inspire Brands' Interest In Dunkin'?

Dunkin Brands Group Inc (NASDAQ: DNKN) confirmed it is in talks to merge with Inspire Brands, and the coffee chain's rising foot traffic over the years may have contributed to the logic behind the M&A talk. 

Retail Data Firm: Says Dunkin' Has Consistent Growth

Dunkin' showed impressive growth over the two years prior to the start of the COVID-19 pandemic, and its momentum could continue after the pandemic, Ethan Chernofsky, Vice President of Marketing at location data analytics company Placer.ai told Benzinga in an email.

In 2018, the coffee brand recorded an average monthly foot traffic gain of 6.6% that expanded to 13.8% in 2019.

Related Link: Jim Cramer Questions SAP And Dunkin News Ahead Of Monday's Open

Foot traffic at Dunkin' stores continued at an "exceptionally strong" growth rate of 9.2% in the first two months of 2020, he said.

The brand has a track record of driving visit growth, and could be on pace for "even greater heights once the specter of COVID lifts," the Placer.ai exec said. 

Gravy Analytics On Dunkin's Superior Recovery

Coffee shops across the U.S. saw 66% less foot traffic in April compared to pre-pandemic levels but foot traffic has since improved to down 41%, Jeff White, CEO of Gravy Analytics, told Benzinga. At Dunkin,' the decline was "less pronounced and [it] recovered more quickly" than its peers, Jeff White, CEO of Gravy Analytics, told Benzinga.

Most notably, Dunkin' foot traffic levels over the summer months and early fall were roughly consistent with pre-pandemic levels, White said.

In contrast, rival Starbucks Corporation (NASDAQ: SBUX) struggled to catch up with its losses, as foot traffic remained around 20% or more below February levels.

"This competitive edge proving the brand's resilience during difficulty would definitely make it an attractive buy for Inspire Brands," White said.

Photo courtesy of Dunkin.' 

 

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