Krispy Kreme confusion as doughnut heartbreak hits NT hard

Seven years since it was first announced, the Territory is still waiting for its promised Krispy Kreme fix. Find out why we’re still waiting.

Darwin’s long wait for a Krispy Kreme outlet has taken a heartbreaking turn – after the doughnut franchise opened an outlet in Townsville.

The North Queensland city, which competes with Darwin for shops and services, welcomed its first Krispy Kreme store in April.

Meanwhile South Australian Krispy Kreme franchise owner Peregrine Corporation remains tight-lipped about the future of the Krispy Kreme manufacturing plant and outlet it promised five years ago at Palmerston Central shopping centre.

Michael Sherlock, a former director of the Sydney-based holding company that held Krispy Kreme’s Australian master franchise, spoke recently on The How Story podcast about challenges that faced Krispy Kreme’s operators.

Michael Sherlock Chief Experience Officer of Sentinel Property Group is across Krispy Kremes. Picture: Pema Tamang Pakhrin

Now chief experience officer with Sentinel Property Group, owners of Casuarina Shopping Square, Mr Sherlock is a frequent visitor to Darwin with an eye on the city’s economic development.

“You’d think Krispy Kreme would be a license to print money,” he told the podcast.

“They’re making their doughnuts very cheaply, but their business model just didn’t work and we had to restructure it to what you see now.

“When they’d open they’d have queues of people getting in their to buy doughnuts and it would fall off pretty rapidly and then they’d have these big stores and they only really had about four metres of retail space where the doughnuts and coffee were, and they’d have these massive stores and the amount of rent they were paying they just over expanded.

“Your rent’s always got to be a percentage of your turnover, that’s why you’ve got to look at your bottom line all the time.

Krispy Kreme’s proposed Palmerston site in November 2023

“It had to be scalable and repeatable but that wasn’t repeatable and they had to adjust the model, have smaller stores, where you catered for everyone.”

To complicate Darwin’s situation further, Krispy Kreme’s Sydney-based Master Franchisees sold the South Australian franchise rights to Viva Energy from Peregrin Properties, which also took in the Northern Territory.

Since announcing plans to develop a Krispy Kreme manufacturing plant and outlet at Gateway, Viva Energy purchased OTR from Peregrine, and has remained silent about its future plans.

In another disappointing Darwin doughnut development, service station franchise BP has announced it is rolling out Krispy Kreme sales at stores across the country - with the Northern Territory a noticeable exception.

Contacted by the NT News to ask whether they sold the glazed confectionary treat, Top End BP operators were unanimous.

“I wish we did,” one said.

Over recent months it emerged the Australian Defence Force snubbed Darwin in favour of Townsville, with the 1st Aviation Regiment transferred there earlier this year – and the announcement Defence Housing Authority would build 500 homes at Townsville while the Lee Point residential project languishes.

Originally published as Krispy Kreme confusion as doughnut heartbreak hits NT hard