No More Excuses for Dunkin' Donuts Not to Dominate

In addition to far more sensible price points and the general value proposition that consumers find in a Dunkin' Donuts versus Starbucks, the truth of the matter is that SBUX is having a terrible year all the way around.

The latest news is that longtime leader and CEO Howard Schultz will be stepping down this month, perhaps to explore his implied political ambitions leading up to the 2020 Presidential Election. 

Either way, the performance of SBUX has been a technical mess, as the stock is breaking down below its 200-day simple moving average today and looking increasingly weaker. I view SBUX as a short into tepid bounces, until further notice. The SBUX customer experience has become tedious and the brand feels watered down in general, with overpriced beverages and mediocre food products likely to meet economic reality sooner than later as consumers smarten up a bit. 

Dunkin' Brands Group, Inc. or DNKN, is a restaurant holding company which runs two chains of fast-food restaurants: Dunkin' Donuts and Baskin-Robbins ice cream shops. For a while now, we have been looking for DNKN and its exciting growth prospects around the country to ignore a sustained rally in the name. 

However, the stock largely consolidated for most of the winter. Now, though, DNKN seems to sense that it is their time to shine. And I would argue we are reaching a now-or-never moment for Dunkin' bulls to take the initiative while SBUX flounders.

As an aside, I recognize it may be too simplistic to paint the coffee wars simply as DNKN versus SBUX, especially with MCD a player, as well as Peet's, Tim Hortons, as well as assorted local coffee shoppes like Rook Coffee Roasters down the Jersey Shore. 

However, in terms of DNKN clearly being in the shadows the last few years as SBUX shined, the current news and technical landscape for both firms smacks of an inflection point.