Krispy Kreme to sell doughnuts at Raley’s

Phil Levine

Thursday, Oct. 21, 1999 | 10:59 a.m.

One of Elvis' favorite snacks is coming soon to a supermarket near you.

Winston-Salem, N.C.-based Krispy Kreme Doughnuts -- maker of the jelly doughnut supposedly favored by the late king of rock 'n' roll -- is about to expand its Las Vegas presence.

In the next two weeks, the company will enter a retail partnership with the Raley's supermarket chain. Dubbed "Java City," the initiative will feature hot coffee and Krispy Kreme doughnuts served by Raley's employees.

Krispy Kreme plans to cook the doughnuts at its main store on Spring Mountain Road and deliver them twice a day to each Raley's store. Java City will be available at 15 of Raley's 19 recently taken over Las Vegas locations.

Lincoln Spoor believes the Java City launch is just the latest ingredient in his company's expanding recipe for success.

"Raley's approached us, and we were intrigued because they bring with them a reputation for high quality products and service," said Spoor, Krispy Kreme's regional franchise owner. "The Java City idea combines the convenience of a supermarket with the type of quality service and product that we promote here."

Spoor said the partnership with Raley's means Krispy Kreme will remove its doughnuts from three Las Vegas Lucky Supermarkets currently offering their products.

Raley's entered the Las Vegas market by acquiring Albertson's stores that Albertson's was forced to sell when it bought the parent company of the Lucky stores.

A Raley's spokeswoman said the company chose Krispy Kreme as its Java City partner because of Las Vegans' "strong sense of association" with the product.

"We've found that their (doughnuts) are very popular in Las Vegas, and as the new kid in town we wanted to be partners with a company whose products are well-liked," said Carolyn White.

A longtime staple of the Southeastern United States, Krispy Kreme is far from a Las Vegas retail veteran.

The company opened its first Las Vegas location at 7015 Spring Mountain Road in March 1998; the store marked Krispy Kreme's first foray in the Western United States.

Since then, Spoor has expanded the company's Las Vegas presence to include stores in both the Excalibur and Texas Station hotel-casinos. Spoor said his company currently employs about 125 people in its Las Vegas stores.

Spoor says selling doughnuts in 24-hour casinos presents a unique set of problems and opportunities.

"The Excalibur (store) has definitely been a challenge," said Spoor. "Unlike our other stores where you can easily predict our rush hours, casino customers are grazing all the time. And it's a very seasonal business. Whereas our regular retail stores find business slower in the hot summer months, that's the busiest period for the casino stores. People bring their kids with them to the casino in the summer and that's great for our business."

Other upcoming Las Vegas locations include stores at Martin Luther King Blvd. and Craig Road, one in Green Valley, and an east Las Vegas store at Nellis Boulevard and Sahara Avenue. Spoor said he is also negotiating with Station Casinos for future retail sites.

Each Krispy Kreme retail store -- except for "satellite" locations such as the one at Texas Station -- cooks its own doughnuts. Spoor said his Spring Mountain location features a $375,000 machine that produces an average of 270 dozen doughnuts per hour.

"The filled doughnuts are all filled by hand, and people love the fact they can stand and watch the doughnuts being made," he said.

A former investment banker, Spoor traded pin-stripes for sprinkles after "falling in love with Krispy Kremes." The self-professed "former junk bond expert" said he spent six years pursuing the franchise rights for Las Vegas.

"I became very passionate about them, and saw Las Vegas as America's city and a perfect location for these stores," he said.

Still, Spoor said he has "some concerns" about the potential changes that may occur when Krispy Kreme goes public next year.

"The initial public offering will likely be in the first half of next year, and we've been told by the corporate office they expect many benefits to emerge from that move," he said. "They're also telling us (the franchisers) that the corporate culture is deeply in-bred in the company, and that won't change when we go public.

"But the fact is that once we're a public company, professional money manager eyes will be looking at the company and that could mean some changes to the way we do business."