Six months after the chain took its trial partnership with McDonald’s nationwide, Krispy Kreme has paused its expansion. Currently, certain types of its doughnuts are sold at over 2,400 of the fast food giant’s locations.
“We are seeing that after the initial marketing launch, demand drops below our expectations, requiring intervention. … we are reassessing our deployment schedule together with McDonald’s while we work to achieve a profitable business model for all parties. Given this, we do not expect to launch any additional restaurants in Q2,” Krispy Kreme CEO Joshua Charlesworth said on the company’s first quarter earnings call Thursday.
In March 2024, Mr. Charlesworth said that he expected to double the chain’s points of access to consumers by the end of 2026 by offering doughnuts at all McDonald’s locations.
Later in the call, Mr. Charlesworth added that Krispy Kreme is working with McDonald’s to streamline operations, make sure that the availability of their doughnuts at McDonald’s is known and prominent, and that Krispy Kreme is in a position to grow their profits from the partnership before expanding to more McDonald’s locations.
Krispy Kreme first started selling doughnuts at McDonald’s in October 2022 with a trial run at nine restaurants in southern Indiana and Kentucky, and then expanded from there to a total of 160 stores in the greater Louisville, Kentucky, and Lexington, Kentucky areas before expanding further in 2024.
