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Krispy Kreme cedes Winona to local bakery

Krispy Kreme cedes Winona to local bakery

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Sometimes the little guy wins.

Less than two years after entering the Winona market, the international doughnut colossus Krispy Kreme has pulled its products from store shelves, ceding the territory to locally owned Bloedow Bakery.

Grocers say Winonans just prefer Bloedow's doughnuts, made at the 80-year-old Broadway bakery.

"Winona loves Bloedow's, period," said Midtown Foods co-owner Tom Thompson. Midtown has not had any complaints since pulling Krispy Kreme from its downtown and Winona Mall stores several weeks ago, Thompson said.

Tracy Clementi, the marketing director for Glazed Investments, which owns Krispy Kreme franchises in Onalaska, Wis., and Rochester, Minn., said the company stopped delivering to Winona three or four weeks ago because there was not enough sales.

Clementi said the company continues to sell its doughnuts in other wholesale markets.

The three Severson Food Plus convenience stores in Winona pulled the doughnuts from their shelves last spring. Owner Tom Severson said Krispy Kreme's minimum delivery was too high for what his stores could sell.

"We weren't selling any," Severson said. He speculated that Krispy Kreme doughnuts, 10 to 20 cents more than Bloedow's, were too expensive. "If you go too high, there's no sale."

Bloedow co-owner Mary Polus said she doesn't think Krispy Kreme had much impact on her sales. Polus and her husband, Hugh, bought the business Jan. 1 from the Gernes family, who ran it since the 1930s. Hugh Polus worked at the bakery for 18 years before buying it.

"During the time they came in was around the time everyone was getting hyped on the low-carb diet," Mary Polus said. "We saw more effect from that."

Polus said former Winonans living all over the country still come back for Bloedow's doughnuts.

Tricia Cummings, who grew up in Winona but lives in San Francisco, said she always visits Bloedow's when she is in town.

"They just taste better," Cummings said while picking up a box of Bloedow's Monday. "I would rather buy doughnuts from a small local store than from a big chain."

Krispy Kreme, based in Winston-Salem, N.C., makes more than 2.7 billion doughnuts a year in more than 360 stores in the United States and abroad. In 2004, the company posted revenues of $666 million.

The company opened its first area store in January 2004 in Onalaska, Wis. That store supplied doughnuts to Winona grocers until a Rochester, Minn., store opened earlier this year.

After an initial public stock offering in 2000, Krispy Kreme's stock price peaked at nearly $50 a share in 2003 before dropping precipitously. The stock was trading at $5 a share Wednesday.

"The Krispy Kreme craze was a flash in the pan," said Midtown Foods' Thompson. "We quit handling them because they weren't living up to what they wanted to be."

City Editor Chris Hubbuch can be reached at (507) 453-3510 or chubbuch@winonadailynews.com.

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