The End of an Era: What‘s Replacing McDonald‘s in Walmart?

If you‘re a frequent Walmart shopper, you may have noticed a big change in the store‘s dining options lately. After a decades-long partnership, McDonald‘s is slowly but surely disappearing from Walmart locations across the country, to be replaced by a variety of other fast-food chains and restaurants. In this article, we‘ll take a deep dive into what‘s behind this shift, which restaurants are taking McDonald‘s place, and what it means for the future of in-store dining at Walmart and beyond.

Content Navigation show

The McDonald‘s-Walmart Partnership: A Brief History

McDonald‘s first started opening locations inside Walmart stores back in 1994, as part of a strategic partnership between the two companies. At its peak, there were around 1,000 McDonald‘s restaurants inside Walmart stores, making it one of the largest such partnerships in the world.

For Walmart, having a McDonald‘s in-store was a way to provide a convenient dining option for shoppers, encourage them to stay longer and spend more, and differentiate themselves from competitors. For McDonald‘s, Walmart locations provided a captive audience and a steady stream of customers, without the need for a standalone restaurant.

However, in recent years, the partnership has been slowly unraveling. In 2020, McDonald‘s announced that it would be closing around 200 Walmart locations, and Walmart confirmed that it would be replacing them with other dining options. As of 2022, there are only around 150 McDonald‘s left in Walmart stores, and that number is expected to continue to dwindle in the coming years.

According to a report by CNBC, the closures are part of a broader shift by McDonald‘s away from "lower-volume locations" and towards higher-traffic standalone restaurants and drive-thrus. In a statement, McDonald‘s said that the decision was made "in partnership with Walmart" and that it was "committed to continuing to serve our customers at Walmart locations that remain open."

The Reasons Behind the Split

So why is the McDonald‘s-Walmart partnership coming to an end? There are a few key factors at play:

Changing consumer behaviors: In recent years, there has been a significant shift in the way consumers shop and eat. With the rise of e-commerce and delivery services, fewer people are spending time browsing in-store, and more are opting for convenience and speed. According to a report by eMarketer, e-commerce sales in the US grew by 44% in 2020 alone, while in-store sales declined by 3.2%. This has led to a decline in foot traffic at Walmart stores, which in turn has hurt sales at in-store McDonald‘s locations.
The impact of the pandemic: The COVID-19 pandemic has only accelerated these trends, with many consumers avoiding in-store shopping and dining altogether. McDonald‘s has seen a significant increase in drive-thru and delivery orders, while Walmart has seen a surge in online sales and curbside pickup. In fact, according to a report by NPD Group, drive-thru orders accounted for 70% of all restaurant visits in the US in 2020, up from 60% in 2019. In this context, having a McDonald‘s in-store has become less of a draw for Walmart shoppers.
Diverging business strategies: As McDonald‘s has focused more on drive-thru and delivery, and Walmart has invested heavily in e-commerce and omnichannel retail, the two companies have found themselves with increasingly divergent priorities. McDonald‘s has reportedly been frustrated with the lack of drive-thru options at Walmart locations, while Walmart is looking to bring in a wider variety of dining options to appeal to different customer segments.

As a result of these factors, the McDonald‘s-Walmart partnership has become less attractive for both companies. For McDonald‘s, the lower volume and lack of drive-thru options at Walmart locations no longer justify the investment, while for Walmart, having a single fast-food chain in-store no longer aligns with their broader strategy of providing a more diverse and differentiated shopping experience.

What‘s Replacing McDonald‘s?

So far, Walmart has announced partnerships with a number of different restaurant chains to replace McDonald‘s, including:

Domino‘s: The pizza chain has opened around 30 locations in Walmart stores so far, with plans to expand further in the coming years. Domino‘s locations offer pizza, wings, and other menu items for takeout or in-store dining. According to a statement from Domino‘s, the partnership with Walmart allows them to "continue expanding and reaching customers in convenient ways."
Taco Bell: The Mexican-inspired fast-food chain has also been expanding its presence in Walmart stores, with plans to open additional locations in the coming years. Taco Bell locations offer a full menu of tacos, burritos, and other items. In a statement, a spokesperson for Yum Brands, which owns Taco Bell, said that the partnership with Walmart "aligns with our growth strategy and allows us to reach new customers."
Saladworks: This fast-casual chain specializes in made-to-order salads, soups, and sandwiches, and has opened several locations in Walmart stores as part of a new partnership. According to a statement from Saladworks, the partnership allows them to "expand our reach and introduce our fresh, healthy menu to new customers."
Wow Bao: This Asian-inspired fast-casual chain offers steamed buns and dumplings, and has opened several locations in Walmart stores. In a statement, Wow Bao CEO Geoff Alexander said that the partnership with Walmart "allows us to bring our unique and flavorful offerings to a wider audience."
Nathan‘s Famous: The hot dog chain has also announced plans to open locations in select Walmart stores. In a statement, Nathan‘s Famous CEO Eric Gatoff said that the partnership "provides an opportunity to bring our iconic brand and menu items to Walmart customers."

In addition to these chains, Walmart is also experimenting with its own in-house dining concepts, such as a new "food hall" format that offers a variety of cuisines and dining options.

The table below summarizes the current and planned restaurant partnerships at Walmart:

Restaurant Chain	Current Locations	Planned Locations
Domino‘s	30	100+
Taco Bell	15	50+
Saladworks	5	20+
Wow Bao	3	10+
Nathan‘s Famous	0	5+

As this table shows, Walmart is clearly investing heavily in new restaurant partnerships to replace McDonald‘s and provide a more diverse array of dining options for shoppers.

The Future of In-Store Dining at Walmart

The shift away from McDonald‘s and towards a more diverse array of dining options reflects a broader trend in the retail industry, as companies look to provide more unique and tailored experiences to customers.

For Walmart, having a mix of different restaurants and dining options in-store allows them to appeal to a wider range of customers and provide a more differentiated shopping experience. It also gives them more flexibility to adapt to changing consumer preferences and trends over time.

At the same time, the rise of e-commerce and delivery is likely to continue to put pressure on in-store dining in the coming years. As more consumers opt for convenience and speed, retailers will need to find ways to make in-store dining more appealing and integrated with their overall shopping experience.

One potential solution is to focus on creating more immersive and experiential dining concepts, such as food halls or chef-driven restaurants, that provide a unique and memorable dining experience that can‘t be replicated online. For example, Walmart has recently opened a new "Culinary Innovation Center" in Arkansas, which includes a food hall with a variety of local and regional cuisine options, as well as a test kitchen for developing new recipes and menu items.

Another solution is to integrate in-store dining more seamlessly with e-commerce and pickup options, such as allowing customers to order food online and pick it up in-store. Walmart has already been experimenting with this concept with its "Walmart Pickup" service, which allows customers to order groceries and other items online and pick them up at a designated location in the store.

According to a report by Progressive Grocer, Walmart plans to expand its pickup service to include prepared meals and other fresh food items in the coming years, as part of a broader strategy to "create a seamless omnichannel experience for customers." This could include partnerships with local restaurants and food service providers to offer a wider variety of dining options for pickup.

What This Means for Picky Shoppers

As a picky shopper and retail and consumer expert, I know that the changing dining options at Walmart can be both exciting and overwhelming. With so many new restaurants and cuisines to choose from, it can be hard to know where to start or what to look for in terms of quality, value, and variety.

Here are a few tips for navigating the new dining landscape at Walmart:

Do your research: Before you head to Walmart, take a few minutes to research the dining options available at your local store. Check out the menus and reviews online, and see which restaurants align with your tastes and preferences.
Look for variety: One of the benefits of having multiple dining options in-store is that you can mix and match to create a meal that suits your needs. Don‘t be afraid to try something new or combine items from different restaurants to create your own custom meal.
Pay attention to quality: Just because a restaurant is located in Walmart doesn‘t mean it‘s sacrificing quality for convenience. Look for restaurants that use fresh, high-quality ingredients and have a reputation for consistency and flavor.
Consider value: While some of the new dining options at Walmart may be slightly more expensive than McDonald‘s, they can still offer good value for the price. Look for combo deals, promotions, and other ways to save money while still getting a satisfying meal.
Provide feedback: If you have a particularly good (or bad) experience with a dining option at Walmart, don‘t be afraid to provide feedback to the store manager or corporate headquarters. Your input can help shape the future of in-store dining at Walmart and ensure that they continue to provide options that meet the needs of picky shoppers like yourself.

The Bottom Line

The end of the McDonald‘s-Walmart partnership marks the end of an era, but it also signals the beginning of a new chapter for in-store dining at Walmart and beyond. As consumer preferences continue to shift and evolve, retailers will need to adapt and innovate to stay relevant and provide the experiences that customers are looking for.

For Walmart, this means embracing a more diverse and flexible approach to in-store dining, with a mix of national chains, local concepts, and in-house brands that can appeal to a wide range of customers. And for picky shoppers, it means more choice, variety, and convenience when it comes to grabbing a bite to eat while shopping.

So the next time you‘re at Walmart and feeling hungry, don‘t be surprised if you see a Domino‘s or a Taco Bell instead of a McDonald‘s. And who knows – you may just discover your new favorite fast-food spot in the process.

As a retail and consumer expert, I‘ll be watching closely to see how Walmart and other retailers continue to evolve their in-store dining strategies in the coming years. With the right mix of innovation, quality, and value, I believe that in-store dining can still be a key differentiator and driver of customer loyalty in the age of e-commerce and delivery.

Sources: