Better Buy: Starbucks vs. Dunkin’
Starbucks (NASDAQ: SBUX) and Dunkin' Brands (NASDAQ: DNKN) are both leading coffee purveyors. Both also rely on consumer discretionary spending, but that is where the similarities end.
Starbucks sells premium coffee, tea, and other beverages. It also offers specialty food items. In terms of its operating model, the company has roughly an equal number of company-operated and licensed stores, but the former accounts for about 80% of Starbucks' revenue.
Dunkin's business is very different. It does not own any restaurants and instead relies entirely on licensing to franchisees. The Dunkin' stores offer coffee and baked goods (e.g. donuts, bagels, and breakfast sandwiches), and its Baskin-Robbins restaurants serve ice cream. These are both a part of the quick-service restaurant segment. The price point is lower than on Starbucks' goods, and people are more likely to either sit down for a quick bite or grab Dunkin's beverages and food on the go.
Source Fool.com
