Consumers opt for donuts in the morning

Breakfast has always represented a traditional time for consumers to ingest bakery foods. And even though donut sales are not as robust as they were a year ago, they still rank as America's favorite breakfast food according to statistics from Information Resources Inc.

For the 52-week period ended July 11, donut dollar sales increased 7.9% to $776 million, and unit sales rose 3.1% to $343 million. During the same period, other breakfast bakery foods did not fare as well (see chart on this page). These statistics measure scanner data at more than 11,300 supermarkets, and represents 90% of all supermarket volumes, excluding Wal-Mart.

Although the donut category has seen continued year-over-year increases, statistics point to a slow down in this once red-hot category. Uncertainty exists about the company mainly credited for the immense popularity of donuts in the last few years. Krispy Kreme Doughnuts Inc., once the darling of the donut industry and Wall Street, has recently shown some warts. Despite posting double-digit increases in total revenues and company store sales for the second quarter ended August 1, the Winston-Salem-based company's income from continuing operations decreased to $6.2 million from last year's $13.4 million. The company also slashed the number of new stores it plans to open in the next year from 100 to 75.

Although donut sales are still robust, it remains to be seen how long the category can sustain significant growth on a year-over-year basis. It's also yet to be seen if the donut category will take the same path as bagels and flame out after a sustained period of significant growth.

Statistics for this chart were supplied by Information Resources Inc., a Chicago-based firm whose scanner data covers more than 11,300 supermarkets, and represents 90% of all supermarket volumes.