Krispy Kreme closed some stores because it couldn't sell enough doughnuts to keep up with the company's automated doughnut machines, which churn out 270 dozen an hour. (You don't slow down a doughnut production machine.) New machinery that makes 65 dozen an hour will make it possible to open smaller, lower-volume units that can operate profitably without excess capacity, the spokeswoman said.I know that the marginal cost of a few donuts probably isn't that high, but...?
It baffles me that they didn't think of this earlier. Managing supply of the product to meet demand seems like a pretty basic strategy.
Later in the article we find out that KK had expected to sell excess supply by the dozen in supermarkets. Apparently that business is sharply down, which is why excess supply is such a problem for them right now.
Which doesn't surprise me. I'm not a big fan of Krispy Kreme, but I do know that most KK fans place a high premium on getting their KK hot and fresh.