(Yicai Global) March 21 -- Mister Donut is giving up on China, a market the fast food chain has served for the past two decades, as Chinese consumers increasingly opt for Asian tastes and healthier foods.
Mister Donut decided to shut its 10 Shanghai stores on March 25 due to business restructuring, the firm said on its official WeChat account on March 18.
Now based in Osaka, Japan's second city, and owned by US firm Dunkin' Brands Group, Mister Donut was founded in the United States in 1955 by Harry Winouker, while his brother-in-law set up Dunkin Donut. Mister Donut's strongest market is Japan and it has over 2,000 stores across Asia, including Thailand and South Korea.
The Mister Donut franchise reached China's mainland in 1999 with its first outlet in Xiangyang Park in the idyllic former French Concession. Dunkin' Brands bought both chains in the 1990s. Dunkin Donut took a different approach when it entered the country in 2008 by including Asian flavors such as pork floss and seaweed rolls on the menu.
Mister Donut has not done enough to upgrade its production and innovation since the 1950s, food industry analyst Zhu Danpeng told Yicai Global, so the brand has become outdated and its products lack surprise.
Competition isn't the main factor driving the chain out of China, it's the unhealthy image of the oily and sweet rolls, Zhu said, adding that younger Chinese prefer healthier food.
But Dunkin Donut's example would suggest that if the flavor is right, the level of oil and sugar content is not a problem. It has opened 19 shops in Shanghai and two other locations in China. In 2015, parent Dunkin' Brands unveiled plans to open 1,400 stores in the country over two decades.
Editor: Emmi Laine