This summer, hundreds of McDonald’s eateries located inside Walmart stores across the US are slated to close because of sluggish business — a trend that was accelerated by the pandemic.
The decades-old partnership between the largest restaurant chain and largest retailer in the world has been fraying for years. There were about 1,000 McDonald’s restaurants inside Walmart stores during their heyday, but by 2020 there were half as many McDonald’s stores, Walmart confirmed.
In July, McDonald’s said in its second quarter earnings report that it would be closing 200 restaurants in 2020 and that over half of them were at "lower sales volume" Walmart locations.
At the end of the summer just 150 McDonald’s stores will remain at Walmart, the retailer confirmed.
The accelerated pace of store closures was first reported by the Wall Street Journal.
McDonald’s does a significant amount of business via its drive-thrus — more so since the pandemic began — and Walmart lacks that option, sources pointed out. Margins at McDonald’s Walmart locations have likewise been hit as "customers at times loaded up on refills and condiments," according to the Journal. Walmart also has largely stopped building new stores, instead remodeling them, which has created awkward situations, according to the paper.
"You can’t do a multimillion-dollar remodel in a store and then have a 1980s McDonald’s at the front," one source told the Journal.
Subway eateries are also pulling up stakes in Walmart stores, according to the paper. The franchise is facing its own challenges, as The Post has reported, with stores closing across the country.