Johnson, Service Area, 1

Market Analysis of Dunkin

Donuts Locations in the
Milwaukee Area
1 BACKGROUND
The retail industry is truly the center of the business market here in
American. As reported by CNBC, revenue for the Dunkin Donuts brand
clocked in at just south of $200 million in 2014. With over 10,000 stores in
the United States and over 3,000 stores internationally in 32 countries,
Dunkin Donuts has made it known that they are one of the big players in the
coffee industry. The companys roots are in Canton, MA, but in recent months
Dunkin Donuts has been making the push towards the west. With this
business expansion comes the building of new Dunkin Donuts
establishments. There are many different factors that are examined when
choosing a new retail location. One of the factors that goes into choosing a
new store location is the service area and the demographics within that
service area. In turn, to determine the demographics of a service area, one
must first figure out the span of the service area for each individual retail
location.
Dunkin Donuts is currently in the process of expanding their franchise
westward, so for this reason the target location of Milwaukee, WI was chosen.
With its centralized location within the states and the fact that Milwaukee
tops the population list in Wisconsin, this makes for an optimal location for

Johnson, Service Area, 2

this study. There are currently only two Dunkin Donuts retail locations within
the city limits of Milwaukee, so this drove the borders of the study out to the
county level. The Wisconsin counties that are included in this study are
Kenosha, Milwaukee, Ozaukee, Racine, Sheboygan, Washington, and
Waukesha Counties. There are a total of 18 retail locations within this study
area. The study area for this project can be seen in Figures 1 and 2 below.

Figure 1 (left) shows the study area is reference to where it is located within Wisconsin. Figure 2 (right) shows
the individual counties within the study area.

While this specific project focuses on the Dunkin Donuts franchise, the
methods utilized throughout can theoretically be applied to any business.
The audience for this project would then be any expanding franchise that

Johnson, Service Area, 3

would be looking to find locations for new retail stores within a particular
study area. This project is relevant because of the spatial elements that have
an effect on the location of a store. One example of this is how stores target
specific demographics when choosing a store location. Using GIS, the process
of allocating retail establishments within a study area can be more simple
and accurate.
The goal of this project is to locate areas within the study area that would
be optimal for future Dunkin Donuts establishments. There will be several
objectives for this retail analysis:
1. Download data necessary to the study (road networks, Milwaukee
area shapefile, and current Dunkin Donuts retail locations).
2. Conduct analysis to determine the service areas for each of the
retail locations existing within the area of interest.
3. Download demographics data (population, race, income, etc.) and
analyze the statistics within the service area and specify significant
demographics.
4. From the fishnet grid, choose cells that display the suitable
characteristics for a new Dunkin Donuts location.
5. Choose suitable census tracts and run location allocation analysis
to help choose which ones cover the best area for new Dunkin
Donuts locations in the Milwaukee area.

2 DATA
The data for this project will come from a number of different online and
offline sources. Both the demographics data and the area of interest

Johnson, Service Area, 4

shapefile will be downloaded from the American FactFinder census site

(factfinder.census.gov). The county shapefiles will be downloaded
individually and then later joined into one single area of interest. The road
network data will be obtained from the Esri network dataset located in the
GeospatialData folder in the Q-drive. Lastly, the Dunkin Donuts retail
locations will be obtained by using the Restaurant Locator on their online site
(dunkindonuts.com). This data is given store by store with just the address
for each location. An online converter will be used to convert the addresses
into latitude and longitude coordinates. This will make it easiest to import the
retail locations into ArcMap.
There arent many reliability concerns with this data. The retail locations
have been double checked using Google Maps to make sure the stores are
where they say they are. The only minor concern I have is dealing with the
demographics data. A lot of demographics data was collected in 2010. While
this may be the case, there are a lot of projected statistics for future years
also located on the FactFinder site. The demographics data will need to be
carefully selected to ensure that projected data isnt being used over actual
data. Even though the actual data may be a bit outdated, a projection is only
a projection.

3 PROJECT APPROACH
The aim of this project is to use GIS to determine the best location for
new Dunkin Donuts establishments in southeastern Wisconsin. This will be

Johnson, Service Area, 5

done by using a time/distance model along the existing road networks within
the cities. Previous research indicated that when using GIS to establish a
trade area, Euclidean distance alone is not sufficient (Cui, 2012). Consumers
travel along roads to get to where they need to be. Therefore, the service
area of a business should be dependent on the road networks of a city
(Okabe, 2001). With these generated service areas and the demographics
data, the location-allocation tool can be run with the assistance of a fishnet
model, to determine areas that would be most suitable for new Dunkin
Donuts locations within the study area.
The methodology behind this project is as follows:
1. Join all the counties into one to create a Milwaukee area
shapefile.
2. Under Network Analyst, use the Make Service Area Layer tool to
create a drive-time buffer around the retail store locations. This will
encompass a ten minute drive time around each.
3. Analyze the demographic statistics located within the service areas
for each existing retail location. From this determine the
demographics that are most keyed on by Dunkin Donuts to figure
out where to best locations for new stores would be.
4. Create a fishnet grid over the Milwaukee area. From the grid
choose points within the grid that correspond appropriately with
the desired demographic features.
5. Under Network Analyst, use the Make Location-Allocation Layer
tool to determine the proposed locations that would be most

Johnson, Service Area, 6

suitable for new Dunkin Donuts retail locations. This tool will use
inputs such as the demographics data and the fishnet grid.

4 EXPECTED RESULTS
The hope for this project is to produce ideal locations for new Dunkin
Donuts retail stores in the Milwaukee area. The suggested retail destinations
will have a similar feel to that of the existing Dunkin Donuts in the area.
Ideally, the suggested locations would have almost the same demographics
and will be in areas that are populated enough to sustain this type of
business.

5 CONCLUSION
The main geographic question for this project is, where are the ideal
locations for new Dunkin Donuts retail stores in the Milwaukee
area? Another question that will be answered are, what are the
demographics that the Dunkin Donuts brand keys on when choosing the
location for a new retail site?
With the integration of the Service Layer and Location-Allocation tools,
the final product for this project will be a successful representation of ideal
Dunkin Donuts locations. The Dunkin Donuts franchise keys on specific
demographics to determine where the ideal locations are for new
establishments. The ideal locations should be near the larger populations
while also keying on areas with more wealth. There is no reason to place a
store near people who cant afford to consume its product. These ideal

Johnson, Service Area, 7

locations could very well be used by the Dunkin Donuts franchise to create
new retail stores for the citizens of Wisconsin.

6 REFERENCES
American FactFinder. (n.d.). Retrieved February 27, 2015, from
http://factfinder.census.gov.

Cui, C., Wang, J., Pu, Y., Ma, J., & Chen, G. (2012). GIS-based method of
delimitating trade area for retail chains. International Journal of Geographical
Information Science, 26(10), 1863-1879.

Dunkin' Brands profit rises on higher US sales. (2014, October 23).

Retrieved March 3, 2015, from http://www.cnbc.com/id/102112255.

For Our Fans. (n.d.). Retrieved February 27, 2015, from

http://www.dunkindonuts.com.

Okabe, A., & Okunuki, K. (2001). A Computational Method for

Estimating the Demand of Retail Stores on a Street Network and its
Implementation in GIS. Transactions in GIS, 5(3), 209-220.