Dunkin' Donut Chain Takes on Fancy Boutiques <b></b>

Detroit-The blue-collar doughnut shop Dunkin' Donuts has begun offering lattes and cappuccinos at all 55 Michigan stores, as it squares off head-to-head with the nation's leading coffee boutiques, Starbucks and Caribou Coffee.

To bolster its position, Dunkin' Donuts plans to open 145 new stores throughout the state within five years. Dunkin' Donuts says the expansion is really about selling more coffee, especially pricey designer coffee, than doughnuts.

Their traditional coffee already accounts for more than half the company's $3 billion annual sales, and it's flooded the area with free cappuccino coupons in newspaper ads and on its to-go coffee cups. Dunkin' Donuts is the world's largest coffee and baked goods chain, daily serving more than 2 million customers, many of whom rarely visit a boutique coffee shop. -Detroit Free Press