Krispy Kreme and McDonald’s have announced the termination of their partnership.
Effective July 2, the beloved doughnuts will no longer be available at McDonald’s locations, according to a joint press release issued on Tuesday. Alyssa Buetikofer, Chief Marketing and Customer Experience Officer at McDonald’s USA, remarked that while the collaboration had benefited the burger giant and its franchisees, it was essential for the partnership to be financially viable for Krispy Kreme as well.
Initially, the agreement allowed Krispy Kreme doughnuts to be sold in 2,400 McDonald’s restaurants. However, the partnership faced challenges and was paused in May due to a downturn in sales. Krispy Kreme also issued a revised financial outlook for the year, citing overall economic “softness” as a contributing factor. This development comes after both companies had previously announced plans to expand their collaboration nationwide by 2026.
“Ultimately, efforts to align our costs with unit demand were unsuccessful, making the partnership unsustainable for us,” stated Josh Charlesworth, CEO of Krispy Kreme, in Tuesday’s announcement.
Looking ahead, Krispy Kreme intends to shift its focus towards expansion through high-volume retail channels and enhancing its international franchise presence. The companies noted that the partnership represented a relatively small and non-material aspect of McDonald’s breakfast offerings.
Following the announcement, McDonald’s stock saw a slight decline, while Krispy Kreme shares experienced an increase of over 1%.
Amid a decline in consumer spending at restaurants, McDonald’s has been grappling with sluggish sales and is attempting to attract customers with various promotions. The chain reported its largest year-over-year decrease in same-store sales in the first quarter since 2020.
This year has been challenging for Krispy Kreme, with shares plummeting approximately 73%. The company’s first-quarter results revealed a net loss of about $33 million.
