Fast-food chains are closing more in-store restaurants as the Covid-19 pandemic accelerates the demise of a once mutually beneficial relationship
Fewer people want to eat their meals at Walmart .
For years Walmart Inc. and large restaurant chains like McDonald’s Corp. enjoyed a mutually beneficial relationship. The retailer delivered a steady stream of diners, and the eateries provided rental profits and a reason for shoppers to stick around stores.
Those bonds have 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.
McDonald’s is closing hundreds of restaurants located in the largest U.S. retailer’s stores, the last vestiges of a roughly 30-year-old experiment between the companies. Around 150 McDonald’s stores will remain at U.S. Walmart locations after another wave of planned closures that are expected to finalize by this summer, according to the burger giant. McDonald’s said in filings that closures focused on low-volume stores based at the retailer. At the peak of the partnership, there were roughly 1,000 McDonald’s restaurants inside Walmart stores.
Franchisees of Subway, one of the largest fast-food chains in the world with locations across Walmart stores, also say they are closing locations this year, citing diminished foot traffic and lower profits.