Krispy Kreme announced on Thursday that it is pausing plans to expand donut sales at McDonald’s locations across the country.
The chain stated it will reassess its rollout strategy in coordination with McDonald’s, aiming to establish a profitable model for both parties involved.
As of the end of March, Krispy Kreme had already placed donuts in over 2,400 McDonald’s outlets, but it doesn’t plan to add any more locations during the second quarter of 2025.
“I’m optimistic about long-term opportunities, but I need to pinpoint ways to enhance sales and work with them to streamline operations,” said Krispy Kreme’s CEO, Josh Charlesworth, during a earnings call. “Once we set ourselves up for profitable growth, we’ll look to expand further.”
Charlesworth mentioned that demand had not met expectations after the initial launch, indicating that “intervention is required” to address the situation.
The partnership between the two companies was announced in March 2024, with an aim to have donuts available at all McDonald’s locations in the U.S. by late 2026.
“Our goal with this partnership is to make Krispy Kreme more accessible across the country and ideally double our points of access by the end of 2026,” Charlesworth said last year. He emphasized that this collaboration could really enhance the fresh, daily offerings available and leverage operational efficiencies.
Additionally, Krispy Kreme has withdrawn its full-year forecast due to “the sluggish macroeconomic environment and uncertainties around the McDonald’s deployment plan.”
Sales have slowed at fast food establishments amid significant consumer economic uncertainty. For instance, McDonald’s U.S. sales dropped by 3.6% in the first quarter, marking the largest decline since the COVID-19 pandemic hit in 2020.
The downturn in sales aligns with warnings from other restaurant chains like Domino’s, Chipotle, and Starbucks, indicating that consumers are spending less due to concerns over inflation and the overall economic outlook.
