McDonald’s will be closing hundreds of its restaurants located in Walmart stores, according to a new Wall Street Journal report.
Approximately 150 McDonald’s restaurants will remain at Walmart stores, down from a high of 1,000 restaurants. According to the RealDeal.com, there were roughly 500 Walmart stores at the beginning of 2020.
The closures come as there is decreased foot traffic in physical locations, as a result of the COVID-19 pandemic.
Walmart has not been immune to the effects of the pandemic. Walmart saw a boost in its e-commerce performance during the pandemic, and the company is investing heavily into the e-commerce space. The Bentonville retailer revealed in its 2020 annual filing that 79 percent of purchases in the United States were shipped through its distribution facilities in fiscal year 2020.
An analysis from Seeking Alpha concluded that while Walmart had shown “solid numbers” in the recent fiscal year, the company had been “struggling in the last few years” and appeared to be losing ground to competitors. In a separate article, the site opined that the loss of McDonald’s restaurants would result in a loss of easy revenue from the store leases and from customers staying in stores longer to eat.
However, a Walmart spokesperson told CNBC that Walmart was working to secure additional restaurants and food options to fill the void left by McDonald’s. According to this report, Walmart is experimenting with Taco Bell and Domino’s Pizza restaurants at stores, as well as smoothie vending machines, ghost kitchens and other types of stores.