Krispy Kreme Doughnuts recently reported its first quarterly loss since the company went public four years ago, citing the nation's low-carb diet craze as the reason for drooping profits. The surprising decline comes after the North Carolina doughnut maker nearly tripled the number of its stores since the year 2000.

While shareholders may find comfort knowing that the company is not experiencing greater internal troubles, there is still concern over whether the slowdown is just an Atkins-diet burp, or a sign of shifting consumer attitudes.

Officers at Krispy Kreme claim that while the company was unfazed by a low-fat fad in the early 1990s, the current craze is being taken as a serious threat to the doughnut chain. To combat the problem, Krispy Kreme will introduce a sugar-free doughnut and a new line of frozen drinks in addition to scaling back expansion plans.

(JuLy, 2004)