Donut retailer Krispy Kreme has yet to deliver on a promise to open a raft of stores in the Midlands as it continues to expand in the UK.

It had hoped to have a cluster of stores in the Midlands before venturing up to Manchester this year, and then onto Scotland and Ireland. The company now has 26 outlets in this country and plans to open 10 more next year, including in Bristol and on the south coast. However, UK MD Don Henshall admitted: "It’s harder to visit potential sites outside London."

The company arrived in the UK three years ago when it opened a concession in Harrods. There are now Krispy Kreme stores in London, Oxford, Birmingham and Milton Keynes, while there are also 50 Tesco stores with in-store cabinets selling the doughnuts within the M25 area.

Sales are rising as the company is expected to turn over £19m for the financial year to January 2007, up from £12.5m the previous year.

It is a less healthy financial picture in the US where the company is being investigated by the Securities and Exchange Commission. Revenues there are set to fall and it has closed 75 of its 370 factories.