Thu. Nov 21st, 2019

Dunkin Donuts and Baskin Robbins set to close up shop in South Africa

dunkin donuts baskin robbinsTwo years in and the expansion plan has already been abandoned.

dunkin donuts and baskin robbins set to close up shop in south africa 1024x683 - Dunkin Donuts and Baskin Robbins set to close up shop in South Africa

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According to Grand Parade Investments (GPI), we will no longer have Dunkin Donuts and Baskin Robbins stores operating in South Africa.

In simpler terms, the exports are packing up their business and leaving the country while the going is still a little tough.

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Why’s Dunkin Donuts and Baskin Robbins closing down?

As reported by Business Tech, the two giant fast food retailers launched in Cape Town in the latter parts of 2016, months after their South African master franchise licenses were acquired by Grand Foods.

For GPI and Dunkin’ Brands, this was a massive franchise import project with long-term sustainability plans.

The idea was to launch 250 Dunkin Donuts stores and 70 Baskin Robbins in South Africa, the breeding grounds being in the Western Cape and Johannesburg.

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However, in a little over two years since the launch date, the project has only yielded 11 Dunkin Donuts stores and only five Baskin Robbins’ in Cape Town.

In their statement, GPI stated that the decision to shut down operations in South Africa was motivated by significant losses in financial performance in the last two years.

“The decision to exit Dunkin Donuts and Baskin Robbins was made following sustained losses in these businesses and an unsuccessful process to dispose of these businesses.

“The decision is in line with the company’s value-based strategy, which aims at improving the groups capital allocation by channelling capital to high-value potential assets, such as Burger King.” they wrote in their statement.

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Unstable South African economy poses threat to labour

This causes a serious threat to unemployment in the province. This news comes on the same day Premier Helen Zille was delivering her final State of the Province Address (SOPA 2019), where she championed the city for its attraction of commerce and its progressive unemployment rate.

In a larger context, this poses a threat to incoming foreign investments. Statistics South Africa’s quarterly labour force survey noted a slight decrease in the unemployment rate, down by 0.4 percentage points to 27.1%.

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The outlook on Q1 of 2019 is already looking bleaker than ever, especially considering the fact that just a day ago, we heard news from Sibanye-Stillwater about the possibility of mass retrenchments that could see more than 6 000 jobs cut.

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