So Dunkin’ Donuts has entered the UK market, with two locations so far, and plans for expansion to 100 outlets in five years. The locations of the first two outlets, Harrow and Chelmsford (with plans for a third in Cambridge) make me feel confident about the chances for the chain’s future success in the UK. Not too flashy, with low rents. The mistake of many US food chains has been to occupy high profile central London outlets, with very high rents, and this rarely works out. This lack of arrogance on the part of DD may seem refreshing, but their humility stems from the fact that this is their third attempt to crack the UK market.

Despite media claims about the “battle of the donuts”, Krispy Kreme will not be DD’s major rival in the UK. DD will compete primarily with Greggs, supermarkets, McDonald’s, and to a lesser extent the likes of Costa and Starbucks. Greggs is the company that has the most to fear from DD’s expansion, although Greggs is a wily competitor. Greggs did not emerge as the sole national bakery chain by falling asleep at the helm.

DD’s main customer base will be commuters, particularly during the lunchtime period. I haven’t been a DD either in the UK or elsewhere, so I can’t comment specifically on the food quality, but as it looks to be similar to McDonald’s and Greggs standard. If this is a case, it will be difficult for DD to succeed without matching their competitor’s prices. Due to its obvious initial cost disadvantage to its competitors due to its lack of scale, DD’s American parent company will have to be prepared to absorb sustained losses for at least a few years before the chain becomes profitable. The question is, how badly to DD want to gain a slice of the UK market?