Dunkin' Donuts empire makes splash in Yonkers amid recession

Phil Reisman
Journal News columnist

You know the economy is in the toilet when the mayor of the fourth- largest burg in the state of New York shows up for a grand opening of a Dunkin' Donuts, an event which actually happened yesterday in Yonkers.

Perhaps a city with a revenue shortfall should just take what it can get these days and be grateful.

However, Mayor Phil Amicone didn't exactly see it that way. In fact, he laughed when I suggested this was a sign of the times.

"No, but if it is, it's been a sign of the time since I became mayor," he said. "I've shown up for little pizzerias, nail salons - any time anybody opens a business.

"Truth is, we want to support them. Whether they're employing one or two people, or five or 10 people - they're still employing people, and it's a business. And if it adds to the city, it's all good."

So there he was at Nepperhan and Lake avenues, triumphantly wielding a jumbo pair of photo-op-friendly scissors that are required equipment for public occasions both big and small. The scissors easily glided through the thick red ribbon. Indeed, they looked sharp enough to slice the head off a chicken.

A handful of onlookers clapped and cheered, including a little guy named Anthony who was dressed in a slightly stained doughnut costume. Passing for good news, the ribbon-cutting was cheerfully weird.

During the Great Depression, doughnuts were cheap, a 5-cent food staple. They called them "sinkers" in those days.

Therefore, it's not a surprise that in this modern recession, the Dunkin' Donuts empire would be growing rather than contracting like so many other businesses. The sinker trade is so good, in fact, that Sunil Rajan, a co-owner of the new Dunkin' Donuts, left his job as an investment banker at Bear Stearns four years ago to get in on it.

Obviously, glazed Munchkins are a kinder, gentler way to make money than selling collateralized debt obligations.

Rajan has two other Dunkin' Donuts franchises in Yonkers and plans to open a fourth store by the end of the year. He employs between 75 and 90 full- and part-time workers.

"I wouldn't say we're recession-proof, but I'd say we're recession-resistant," Rajan, 46, told me. "We may feel the pinch a little bit, but it's just a little bit. There is some trade-down from Starbucks and others to just come to our place and pick up some value. ... We're all doing quite well."

Last year, McDonald's and Wal-Mart were practically the only corporate titans to make money. As Rajan said, Dunkin' Brands Inc. did well, too, but there are no hard numbers on it because the company is not publicly traded.

More than 700 new Dunkin' Donuts stores opened in 2008, company spokesman David Puner said. That brings the total number of U.S. franchises well past 6,400, covering 34 states. There are 2,219 in 30 countries outside the United States.

Puner would not divulge the doughnut master plan for future growth, saying, "We're a privately held company and don't share forward-looking info."

Rajan said it's not necessarily so that the higher the profits, the fatter Americans will get. Pointing to the menu board in his store, he talked about relatively inexpensive, low-fat items like the flatbread and egg-white sandwiches.

"Many of them are 300 calories or less, so we've addressed that," he said. "And yet, though we are doughnuts, less than 20 percent of our sales are doughnuts."

Mostly, customers buy coffee and other beverages.

I asked Rajan what he thought about the new fad for laws that require fast-food restaurant chains to post calorie counts. "Institutionally, the answer is we hate it," he said.

Nevertheless, he understood the need for a balanced diet.

"Doughnuts aren't bad for you," he said. "Too many doughnuts are bad for you."

And although he felt that government shouldn't mandate calorie counts, he also said, "Sometimes people need help making the right decision. Some people need all the help they can get."

Speaking of the war against fat, on the same day Amicone was celebrating the supreme ecstacy of scarfing down a bag of jelly doughnuts, he also welcomed the state's first lady, Michelle Paige Paterson, who spoke to sixth-graders at the Scholastic Academy for Academic Excellence. Her topic dejour? That's right, childhood obesity.

Staff writer Candice Ferrette, who covered Paterson's appearance, said some highly fattening snack food was served along with an array of healthier refreshments.

Amicone said he resisted the cookies, but recognized the irony.

"Somebody missed something there," he said.

So how does he square the seeming flip-flop of going to an anti-obesity thing and then presiding over the opening of a fast-food restaurant linked to the blubber epidemic? What sort of political wishy-washiness is this?

"I try to eat healthy most of the time, but I really do like Dunkin' Donuts," Amicone confessed.

To sum up Amicone's position: He's against obesity and for jobs.

He's also in favor of chocolate-glazed doughnuts. So a word to the wise - don't leave any laying around if the sweet-toothed mayor is near and carrying a large pair of shears.