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The partnership between McDonald’s and Krispy Kreme is coming to a sweet, but short end. The two companies announced Tuesday that they will officially end their doughnut deal on July 2nd. While McDonald’s says the collaboration was beneficial for them and their franchisees, Krispy Kreme wasn’t seeing the same level of success.
The deal, which initially placed Krispy Kreme doughnuts in 2,400 McDonald’s locations, was paused in May due to slowing sales. This contributed to Krispy Kreme withdrawing its financial outlook for the year, citing economic headwinds. The ultimate goal of a nationwide rollout by 2026 has now been scrapped.
Krispy Kreme CEO Josh Charlesworth stated that efforts to balance costs with demand were unsuccessful, making the partnership unsustainable. The doughnut chain will now focus on expanding through high-volume retail locations and growing its international franchises. Both companies downplayed the impact of the dissolved deal, with McDonald’s characterizing it as a small part of their breakfast business.
Following the announcement, McDonald’s shares dipped slightly, while Krispy Kreme’s saw a modest increase. This comes as McDonald’s grapples with declining sales amidst reduced consumer spending in the restaurant sector. Krispy Kreme has also faced challenges, reporting a significant loss in its first quarter and a sharp decline in share value this year.