Krispy Kreme, which announced plans this week to give a free donut to everyone who gets a free COVID-19 shot, is defending itself against some of the naysayers who think the freebie could have unintended consequences.
The donut chain's well-meaning (and literally sweet) incentive sparked some backlash on social media, with everyone from doctors to comedians pointing out that obesity — which is rampant in the U.S.— is also a prime risk category for the coronavirus. Additionally, there's a history of big brands offering generous specials that end up becoming costly mistakes.
Krispy Kreme is offering free donuts to anyone who’s been vaccinated. Which is great news for anyone who got the shot but still has a death wish.
— Stephen Colbert (@StephenAtHome) March 23, 2021
However, CEO Mike Tattersfield defended his company's intentions in an interview with Yahoo Finance Live on Friday. "We're a sweet treat company, [and] if folks don't want to visit a donut shop, they don't have to."
Rebutting the growing critique, Tattersfield added that if "folks that want to get a vaccine, if they decide to combine a Krispy Kreme pickup [for] a doughnut, they can. That's how we look at it.... generosity."
Last March, Krispy Kreme launched a similar initiative in response to the pandemic. It allowed all healthcare workers to receive a free dozen of its original glazed donut. Tattersfield says the initiatives have been well received by the community.
'We pick up the tab'
"I drop off a lot of doughnuts to the healthcare system. They're very appreciative, given the days that they have to work...people are always looking for a little sweet treat break. It's okay," he said.
These initiatives are just a few of several being offered by Krispy Kreme, raising the question about whether the company is giving away more than it’s taking in.
However, Tattersfield insisted the giveaways are luring more customers than anticipated into its stores. In 2020, Krispy Kreme’s same-store sales surged amid the pandemic: Although lockdowns curbed foot traffic, those losses have mostly been offset by hungry, bargain-hunting consumers. That momentum has continued into this year, the CEO said.
"Last year, we gave away 30 million doughnuts.. we didn't come into the year thinking that we're going to do 30 million doughnuts from giveaway."
Nevertheless, "our franchisees have been great partners with us and have benefited along the way as well," Tattersfield added. As far as who picks up the tab to reconcile that — the corporate headquarters does.
"We've always done fundraising and had some type of give back to the community. The majority of the United States is a company owned system, so we pick up the tab,” he explained.
Meanwhile, Tattersfield is confident that these very generous incentives will not spoil the company’s bottom line, as it has for a few other brands that found themselves on the wrong side of freebies. Krispy Kreme doesn’t have any insurance for too many giveaways, he said.
And the company may be on its way to an even bigger year in sales if customers get lured in by the prospect of a free donut every day of the year.
According to Tattersfiled’s logic, some healthcare workers will come in and "order five dozen doughnuts, or 10 dozen doughnuts even at times. Yet eventually, they’ll "start to pay for them themselves."
None of the donut chain’s patrons are trying to "beat the system or something like that," the CEO said. "We just focus on actually doing the generosity. That's Krispy Kreme."
Brooke DiPalma is a producer and reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
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