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Walmart eyes other options as McDonald’s, Subway pull out

Big-box retailer tests Domino’s and Taco Bell outlets in some locations, company says

Ron Ruggless, Senior Editor

April 9, 2021

2 Min Read
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While McDonald’s Corp. and Subway are closing units inside U.S. Walmart Inc. stores, the retailer says it is replacing those with other concepts such as Domino’s Pizza and Taco Bell.

“We’re definitely looking to bring in new and exciting brands,” said Avani Dudhia, a Walmart corporate spokesperson, on Friday.

In its February annual report, Chicago-based McDonald’s said its U.S. division expected to close “roughly 325 restaurants in 2021; a majority of which are lower sales volume McDonald's in Walmart locations.” McDonald’s said it expected about 650 net restaurant additions in 2021.

The Wall Street Journal reported Friday that longtime restaurant relationships between some restaurant chains had “frayed as more shopping goes online and fast-food restaurants depend more on drive-through windows for sales, a feature Walmart locations don’t have. The pandemic has made indoor dining unappealing—or prohibited—for many shoppers, accelerating the split.”

Over the past 30 years, McDonald’s peaked at about 1,000 units in Walmart stores. Walmart has about 3,570 SuperCenters in the United States.

Dudhia said the largest U.S. retailer’s stores expects to have 150 McDonald’s remaining in Walmart units in the next few weeks and more than 1,000 Subway sandwich outlets.

Related:Walmart takes aim at COVID in underserved, vulnerable communities

Dudhia said foodservice outlets in Walmart stores “gives us the opportunity to look at local communities and ensure that our customers are getting new and exciting experiences that they may not be getting otherwise.”

The company is testing a location of Yum Brands’ Inc.’s Taco Bell as well as expanding its relationship with Domino’s Pizza Inc., which has 30 units in Walmart locations, Dudhia said.

Most of the Domino’s locations allow for customer pickup at the Walmart locations as well as delivery, Dudhia said, which has been beneficial during the COVID-19 pandemic.

“We’re definitely looking to bring in new and exciting brands,” she said. “Again, these are all things that our customers are looking for.”

Another Walmart spokesperson told CNBC that one store has a smoothie vending machine and several others will offer ghost kitchens.

Related: McDonald’s CEO orders review of workplace safety policies

Another Walmart spokesperson told CNBC that one store has a smoothie vending machine and several others will offer ghost kitchens.

Toronto-based Ghost Kitchen Brands in March said it was rolling out its hybrid virtual brand/ghost kitchen concept in dozens of Walmart stores in the U.S. and Canada.

The new service allows shoppers in those locations to select items from the menus of about 15 national and regional restaurant and CPG food concepts, including Quiznos, Saladworks and others, combined in a single order. The on-site kitchens, meanwhile, will also serve as delivery hubs for those brands via third-party delivery services such as Uber Eats.

Related:Walmart’s omnichannel game plan yields fiscal 2021 sales boost

Update April 9, 2021: This story has been updated with additional information on Ghost Kitchen Brands.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless 

About the Author

Ron Ruggless

Senior Editor, Nation’s Restaurant News / Restaurant Hospitality

Ron Ruggless serves as a senior editor for Informa Connect’s Nation’s Restaurant News (NRN.com) and Restaurant Hospitality (Restaurant-Hospitality.com) online and print platforms. He joined NRN in 1992 after working 10 years in various roles at the Dallas Times Herald newspaper, including restaurant critic, assistant business editor, food editor and lifestyle editor. He also edited several printings of the Zagat Dining Guide for Dallas-Fort Worth, and his articles and photographs have appeared in Food & Wine, Food Network and Self magazines. 

Ron Ruggless’ areas of expertise include foodservice mergers, acquisitions, operations, supply chain, research and development and marketing. 

Ron Ruggless is a frequent moderator and panelist at industry events ranging from the Multi-Unit Foodservice Operators (MUFSO) conference to RestaurantSpaces, the Council of Hospitality and Restaurant Trainers, the National Restaurant Association’s Marketing Executives Group, local restaurant associations and the Horeca Professional Expo in Madrid, Spain.

Ron Ruggless’ experience:

Regional and Senior Editor, Informa Connect’s Nation’s Restaurant News and Restaurant Hospitality (1992 to present)

Features Editor – Dallas Times Herald (1989-1991)

Restaurant Critic and Food Editor – Dallas Times Herald (1987-1988)

Editing Roles – Dallas Times Herald (1982-1987)

Editing Roles – Charlotte (N.C.) Observer (1980-1982)

Editing Roles – Omaha (Neb.) World-Herald (1978-1980)

Email: [email protected]

Social media:

Twitter@RonRuggless

LinkedIn: www.linkedin.com/in/ronruggless

Instagram: @RonRuggless

TikTok: @RonRuggless

 

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