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Krispy Kreme to open in Wal-Mart

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CHARLOTTE — Krispy Kreme Doughnuts Inc. plans to open one of its doughnut-making retail stores within a Wal-Mart Stores Inc. Supercenter in Mt. Airy, N.C., as part of a test with the retail giant, a spokeswoman said.

Krispy Kreme spokeswoman Brooke Smith told Dow Jones Newswires that the Winston-Salem, N.C., doughnut chain expects to open one of its so-called factory stores, which typically produce hot doughnuts in front of customers, around mid-October.

Also that month, Krispy Kreme plans to open shops within four other Wal-Mart stores, in order to test the doughnut chain's various store formats. Two will be "doughnut and coffee shops," which are smaller but deliver hot doughnuts and coffee, and two will be "fresh shops," or outlets selling doughnuts delivered to the store daily from a nearby Krispy Kreme store.

Krispy Kreme chief marketing executive, Stan Parker, said the factory store in the North Carolina Wal-Mart will be about 1,800 square feet and located near the Supercenter's bakery section. A typical Krispy Kreme factory store is about 4,500 square feet, but some of that space is for seating, which the Wal-Mart outlet will not have, Parker said.

The doughnut and coffee shops will be in Wal-Mart stores in Virginia Beach, Va., and Scottsburg, Ind., which is near Krispy Kreme's factory store in Louisville, Ky. Those shops will be between 840 and 1,000 square feet, he said.

The fresh shops will be in Wal-Marts in Seymour, Ind., and Christiansburg, Va. Factory stores in Roanoke, Va., and Indianapolis will supply the Wal-Mart shops with finished doughnuts.

All five outlets will be owned and operated by Krispy Kreme, Parker said. The chain, which operates more than 300 stores in the United States, Canada and Australia, already sells boxed doughnuts in about 125 U.S. Wal-Mart stores.

Its Canadian franchisee last month announced it would begin wholesale sales to several Wal-Mart stores across southern Ontario.

"We're always looking at ways to make our doughnuts more convenient to our customers, and this represents a way to do that," Parker said. "We're testing different concepts to see which ones get the best consumer reaction. It's conceivable that all three will be successful."

A spokeswoman for Wal-Mart, based in Bentonville, Ark., said the retailing giant doesn't have a deadline for determining whether the outlets are successful.

"We test a lot of different things at our stores," Sharon Weber said. "We're always looking for ways that we can better serve our customers and offer them variety when they're shopping at our stores."

Krispy Kreme shares closed Wednesday at $41.38, up 43 cents, or 1 percent, on the New York Stock Exchange.