Why You Have to Wait Two Hours for a Doughnut in Japan

Queuing is nothing special in Japan. Every day, television programs show long lines of people queuing for up to one hour even in front of regular noodle shops, only to finish their food within less than ten minutes. Now, the Tokyo branches of the American doughnut chain Krispy Kreme are taking this phenomenon to a new level.

Since its opening in December 2006, a persistent waiting line has formed in front of the first branch at Shinjuku Southern Terrace. For the two-minute bliss of a Krispy Kreme doughnut customers are willing to wait patiently for at least one hour and at peak times, two or even three hours long. Krispy Kreme has now expanded to Yurakucho in the east of Tokyo and Tachikawa in the far west, as well as to the city of Kawaguchi (Saitama) and Funabashi (Chiba) and most recently to Shibuya. What is Krispy Kreme doughnuts' formula for success?

The first Krispy Kreme shop was founded in 1937 in North Carolina, but nationwide expansion in the US did not happen until the 1990s. As a result of expansion, the stock price, which performed excellently after the IPO in 2000, experienced a sharp decline after only a short period of time. Sales of the sugar-glazed calorie bomb (with at least 210 calories in its classic, 'original glazed' variation and up to 390 calories in a 'Krispy Kreme Devil's Food') have declined, hit by the trend towards healthy eating. Some observers see few alternatives for Krispy Kreme in the long run because of its onesided product line. Many believe the chain will not last in competition with die coffee and fast-food giants Starbucks and McDonald's that have greater flexibility in responding to such market moods.

Since 2001, Krispy Kreme has been following a strategy of internationalization that, to some observers, looks like an emergency road out of the increasingly hard doughnut business in North America. After conquering the markets of other Asian locations such as South Korea and Hong Kong, Krispy Kreme turned to Japan and entered via a joint venture with the retail experts from Lotte Co and Revamp Corp. The run on the Shinjuku branch proves that the cooperation with local partners paid off.

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Doughnuts in Japan

Doughnuts are nothing new in Japan. Starting in the late 1970s, the two big chains Mister Donut and Dunkin' Donuts entered the Japanese market almost at the same time. Nowadays, doughnuts can be purchased in many supermarkets and restaurants. Unlike food-service chains such as McDonald's or Starbucks the doughnut business did not face competition from local imitators. In 1998, Dunkin' Donuts left the market so that only Mister Donut remained in Japan with more than 1300 shops. The different performance is said to relate to differences in management strategies, not in quality. So far, it seems that the newcomer Krispy Kreme has a winning strategy.