Around 150 McDonald’s restaurants will remain at the US Walmart locations after another wave of planned closures, according to the Wall Street Journal. Closures target low-volume stores and are expected to finalize this summer.
McDonald’s closures pose a challenge to Walmart, which has been earning revenue from restaurants leasing space inside its stores for a long time.
Walmart is working to find new models for its store restaurants, focusing more on meals-to-go, delivery, and joining with small regional chains that appeal to local shoppers.
Walmart and McDonald started working together in 1994, and the retailer at one time allowed the restaurant chain to be exclusive when it was present in a store.
McDonald’s locations inside Walmart stores are generally less profitable than stand-alone restaurants due to lack of drive-through sales.
There were about 500 McDonald’s locations in Walmart stores at the start of 2020, down from more than 800 in 2012 and 1000 at the peak of the partnership.
Despite McDonald’s planned closures before the pandemic, it has sped them up during the crisis.
McDonald’s stock is currently declining. MCD: NYSE is down 0.34%
