McDonald's restaurants at Walmart Stores are like a surprise package in a gift box. It's nice to be able to sit down and eat something after a long shopping trip at one of Walmart's massive stores. As a result, McDonald's restaurants are a well-known fixture in Walmart stores. However, you may have noticed that McDonald's is no longer available in some Walmart locations and wondered, "What's replacing McDonald's?"
Following the current wave of closure affecting McDonald's situation within Walmart, there will be only 150 outlets left nationwide. During the pandemic, several eatery chains hastened the closure of restaurants in lesser footfall areas, and McDonald's announced, that it would do the same. The closure within Walmart stores was planned for the coming years but was hastened due to its low customer volume.
As the pandemic has changed shopping habits, customers are increasingly shopping online and opting for a drive-thru window. As a result, McDonald's planned to close hundreds of its outlets inside Walmart stores.
Walmart has confirmed that McDonald's will have about 150 locations leftover from its 3,570 Supercenters, which has been steadily declining over the years from a peak of about 1,000 locations.
McDonald and Walmart have partnered for three decades since 1994, giving shoppers the pleasurable option to order tasty fast food like fries, burgers. This was after filling up their shopping carts with groceries and merchandise. When McDonald's and Walmart were at the peak of their 30-year relationship, there were about 1,000 McDonald’s locations inside Walmart. The pandemic has changed how consumers shop and eat.
Today, many Walmart shoppers order their groceries online and have them delivered to their homes or dropped off in their trunks in the parking lot. They no longer have to enter the store. In its most recent fiscal year, which ended on Jan. 31, Walmart's online sales in the U.S. increased by 79%. This is reflecting the fact that its foot traffic has turned into web traffic.
McDonald's Walmart locations were generally less profitable than its standalone restaurants even before the pandemic since drive-throughs have become the primary revenue generator. Shake Shack and Sweetgreen are just a few of the chains adding drive-thrus as a convenience to their customers, who prefer the convenience of the contact-free approach. Sit-down eating became risky or prohibited in the wake of the pandemic. Increasingly, Walmart walk-by traffic is being impacted by shoppers' desire to buy online and have a hassle-free checkout experience.
As a replacement for the closed McDonald's, Walmart is testing a variety of other options. The official from Walmart said that these spaces have been freeing up over time. "Currently, we are filling them as they become available. Walmart is replacing McDonald's with new Domino's and Taco Bell locations. Walmart leases space to other businesses, generally restaurants, mostly near the front of its stores. According to the official, the big-box retailer collaborates with both national and local businesses, depending on the needs of the community. Domino's Pizza is an especially good fit, they say, because the restaurants primarily rely on pick-up and delivery. Some of the top chains which are filling these spaces are Chick-fil-A *Taco Bell *Wendy's *Burger King *Dunkin'*Subway *Domino's *Chipotle Mexican Grill *Pizza Hut *Panera Bread *KFC.
An official from Walmart said that it is testing locations with Yum Brand's Taco Bell and Domino's Pizza. The official said in other stores, the space is being used for other types of shops that offer various services like tool rentals and hair plaiting. Some contenders, Costco, for instance, runs its own food court and strives to keep prices low while maintaining quality products in order to drive club traffic. Target's food service areas are run under authorizations from Starbucks and other companies. Costco received widespread coverage when it confirmed that seating and a full menu would be returning to locations soon. "The food courts work," a Costco official told news channels, are one of the things for which we are well-known."
Before the pandemic, two waves of closures were planned for 2020, with another wave set to finish this summer, leaving 150 locations open. McDonald's has previously shared these plans with shareholders during earnings calls, including saying in a fourth-quarter 2020 note on openings and closings that "the majority of closures across the U.S. for lesser sales in the McDonald's locations in Walmart stores."
Walmart and McDonald's business partnership made no sense for either company in present scenario. McDonald's restaurants inside Walmart's do not have drive-thrus, which have grown in popularity across the fast-food industry. According to the chain, drive-thrus account for 70% of orders in major markets.
In recent years, Subway franchisees have also closed their Walmart locations. Due to decreased foot traffic and profits, Subway is closing its establishments within Walmart’s. Similarly, Dunkin' decided to close 450 locations within Speedway in February 2020 because it could not offer its full menu, according to Restaurant Business.
Before the pandemic, two waves of closures were planned for 2020, with another wave set to finish this summer, leaving 150 locations open. McDonald's has previously shared these plans with shareholders during earnings calls, including saying in a fourth-quarter 2020 note on openings and closings that "the majority of closures across the U.S. market seem to be from weaker sales volume McDonald's in Walmart store locations."
"With our leased space business, we have a fantastic opportunity to make our stores even more convenient and relevant to local communities. We're excited to keep bringing in new businesses that make sense for our customers and their changing needs " as mentioned by Walmart official. Finally, in order to compete with other large retailers, like Target as well as several grocery stores, such as Hy-Vee, have cafes or restaurants, like as Pizza Hut, found inside of their stores, Walmart incorporates restaurants into its stores. As a result, Walmart employs the same strategy to maintain competition and persuade customers to shop at its store locations.
For information on when your local Walmart will close the McDonald's locations, call your store and ask the store manager. Simply use the Walmart store locator on Walmart's official site to find the phone number.
