Krispy Kreme announced on Thursday that it is pausing the planned nationwide rollout of selling doughnuts in McDonald’s locations. The doughnut company stated that it is working with McDonald’s to reassess the deployment schedule in order to develop a profitable business model for all involved parties.
As of the end of March, Krispy Kreme was selling its products in more than 2,400 McDonald’s restaurants and does not plan to expand to additional outlets in the second quarter of 2025. Krispy Kreme CEO Josh Charlesworth, during an earnings call, expressed confidence in the long-term national opportunity. However, he emphasized the need for collaboration to enhance sales and streamline operations before further expansion can occur.
Charlesworth noted that demand fell short of expectations following the initial launch, necessitating intervention. The partnership between the two companies was announced in March 2024, with plans to offer Krispy Kreme products at all McDonald’s locations in the U.S. by the end of 2026.
Initially, McDonald’s and Krispy Kreme tested doughnut sales at 160 McDonald’s restaurants in Kentucky in 2023. Charlesworth had previously highlighted the partnership’s potential to more than double Krispy Kreme’s points of access nationwide, thereby accelerating the growth of its Delivered Fresh Daily channel and enhancing operational efficiency.
Krispy Kreme also withdrew its full-year forecast due to “macroeconomic softness and the uncertainty surrounding the McDonald’s deployment schedule.”
In the stock market, Krispy Kreme’s ticker “DNUT” saw a decrease of 16.26%, while McDonald’s ticker “MCD” experienced a slight increase of 0.06%. Fast-food businesses, including McDonald’s, have faced sluggish sales amid economic uncertainty. McDonald’s U.S. same-store sales dropped by 3.6% in the first quarter, marking the most significant decline since the COVID-19 pandemic in 2020.
This trend aligns with reports from other restaurant chains like Domino’s Pizza, Chipotle Mexican Grill, and Starbucks, indicating that Americans are reducing dining expenditures due to inflation and a challenging economic outlook.
The report was contributed to by FOX Business’ Aislinn Murphy.