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Dunkin' Donuts Taking on Starbucks

FAIRVIEW PARK, Ohio -- Dunkin' Donuts, long a mainstay in the East, is using Cleveland as a test market, launching 90 new outlets in a blue-collar region with a waistline ranked among the nation's heftiest.

According to the Associated Press, Dunkin' Donuts hopes the push in northeast Ohio and selected other regions will make it the coffee stop of choice in head-to-head competition with the omnipresent Starbucks. But don't expect comfy leather couches in the Formica world of Dunkin' Donuts.

"We want to be Dunkin' Donuts, not Starbucks," said Jay Patel, who opened a showcase store in Fairview Park in February as the chain based in the Boston area began a high-powered expansion into the Midwest. He eventually hopes to own six with his brother.

Patel, 32, who immigrated from India at age 17, said Dunkin' Donuts customers favor rush-hour drive-through convenience over the yuppie ambiance of Starbucks.

"It's a good neighborhood, business is getting better," said Patel, surveying the store and its "go to work" location on the inbound lanes headed to Cleveland. That allows drivers to get into Dunkin' Donuts without turning against traffic, a time saver in the morning.

That kind of attention to detail along with attractive real-estate prices and what the chain politely calls Cleveland's "high proliferation of coffee and bakery consumption" were critical in selecting the city to help boost its national profile, according to Will Kussell, chief operating officer of Dunkin' Brands Inc. in the United States.

The chain, which sells 2.8 million cups of coffee daily, hopes to open 10 stores in the Cleveland area by August and 90 within three or four years. Other big pushes have begun in Cincinnati, Tampa and Jacksonville, Fla., Charlotte, N.C., and Nashville, Tenn.

The Dunkin' Donuts move comes as Americans are increasingly looking to specialty coffees. According to the Specialty Coffee Association of America trade group, gourmet coffee has grown into a $9 billion industry in the United States, up 20 percent in six years.

Starbucks, which has about 45 outlets in the Cleveland area, isn't worried. Spokesman Alan Hilowitz said there's plenty of room for competition. Nationwide, Starbucks has 6,668 locations to more than 4,400 for Dunkin' Donuts.

The newest Dunkin' Donuts stores in Cleveland do 45 percent of their business in drinks and 55 percent in food, but expect those ratios to be reversed with time. Established stores make 60 percent or more of their money in drinks, and Dunkin' Donuts has added lattes and specialty items like iced coffee with a shot of espresso.

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