- McDonald’s is expanding its test with Krispy Kreme to approximately 160 restaurants in Louisville and Lexington, Kentucky.
- Last October, nine McDonald’s restaurants started selling Krispy Kreme doughnuts to test how the menu experiment affected their operations.
- The burger chain has also been leaning into coffee — a common pairing with doughnuts — to encourage diners to visit more frequently.
McDonald’s will sell Krispy Kreme doughnuts at approximately 160 Kentucky locations starting next month, for a limited time.
It’s an expansion of the fast-food giant’s initial test with the sweet treats. In October, nine McDonald’s restaurants in Louisville started selling Krispy Kreme doughnuts. The larger test is meant to assess customer demand and to understand how a larger-scale launch would affect restaurant operations.
Starting March 21, McDonald’s customers at select locations in the Louisville and Lexington areas will be able to purchase Krispy Kreme’s glazed, chocolate iced with sprinkles and chocolate cream-filled doughnuts. The treats will be available all day and can be ordered in the drive-thru lane, in the restaurant, through the McDonald’s app and for delivery.
McDonald’s has already made small tweaks from the earlier test, which didn’t allow customers to order the doughnuts for delivery and included raspberry-filled doughnuts in place of the chocolate cream-filled. But the expansion suggests the initial experiment was at least somewhat successful in driving traffic despite macroeconomic challenges.
Consumers have been pulling back on restaurant spending as inflation puts pressure on their budgets. But both Krispy Kreme and McDonald’s have reported strong sales in recent quarters.
McDonald’s saw its U.S. traffic increase in the second half of the year, bucking the industry trend thanks to its cheap deals. The burger chain has also been leaning into coffee — a common pairing with doughnuts —to encourage diners to visit more frequently. And Krispy Kreme has been able to raise prices without hurting its sales because consumers are willing to splurge on affordable treats, such as fresh doughnuts.
Krispy Kreme uses a “hub and spoke” model that lets it make and distribute its treats efficiently. Production hubs, which are either stores or doughnut factories, send off freshly made doughnuts every day to retail locations such as grocery stores and gas stations.
Krispy Kreme Chief Operating Officer Josh Charlesworth said in January at the ICR Conference that the McDonald’s test showed the doughnut chain can execute its daily fresh deliveries to restaurant locations. Beyond that, however, the company’s executives have declined to share more details on the progress of the test.
Source: Business - cnbc.com
