Stop & Shop Ends Deal with Dunkin Donuts, Making Room for Starbucks

The Boston Globe reports that Quincy grocery chain Stop & Shop will drop Dunkin' Donuts stores from inside 130 supermarkets next year and likely replace them with rival java giant Starbucks, according to a Dunkin' franchisee executive and a supermarket union official.

Mark Dubinsky, president of the Dunkin' Donuts Independent Franchise Owners Association, yesterday said Stop & Shop is not going to renew its master lease with Dunkin' when it expires early next year.

"For some reason, Stop & Shop didn't want to continue. A lot of Dunkin' franchises are sad to see the relationship end," Dubinsky said. "Franchises liked the ability to access supermarket customers that may not frequent traditional stores. It was a good deal while it lasted."

Most of the supermarkets with Dunkin' Donuts shops are in Massachusetts and Connecticut.

Now, Stop & Shop appears poised to expand a relationship with Starbucks it first began two years ago. Starbucks has 93 coffee stands operating inside Stop & Shop and its sister grocery chain Giant Food. Mark Espinosa, president of UFCW Local 919 in Connecticut that represents Stop & Shop employees, yesterday said he had been told by the grocer's labor relations executives that Starbucks would be taking over the Dunkin' sites.

"It was a challenging relationship," Dubinsky said. "Dunkin' had to use Stop & Shop employees because of the union and had difficulties managing employees because they technically weren't their own."

Espinosa said the setup led to a lot of confusion. Stop & Shop, he added, had a relatively hands-off approach to the Dunkin' shops, while the union expressed concerns that Dunkin' was staffing the stores only with management positions to avoid complying with staffing levels and other provisions of the union contract.

Cross Posted at: Franchising in New England