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McDonald's will close hundreds of locations in Walmart stores

The fast-food chain will keep about 150 locations at Walmart stores.
/ Source: CNBC

McDonald’s is closing hundreds of restaurants inside of Walmart, as customers increasingly shop online and opt for the drive-thru window.

The big-box retailer confirmed Friday that the fast-food chain will have around 150 locations that remain across its 3,570 SuperCenters. That has gradually fallen over the years from a peak of about 1,000 locations.

The closures were first reported by The Wall Street Journal.

For about three decades, the two corporate giants have teamed up and made it possible for Walmart shoppers to order a burger and fries after filling up their shopping cart with groceries and other merchandise. Yet the pandemic has shaken up the way that customers prefer to shop and dine.

Many Walmart shoppers now buy their groceries online and have them dropped in their trunk in the parking lot or delivered to their home, eliminating the need for them to step inside stores. Walmart’s e-commerce sales in the U.S. grew by 79% in the most recent fiscal year ended Jan. 31, compared with the previous year — a reflection of the foot traffic that’s become web traffic.

Chains like Sweetgreen, Shake Shack and Chipotle Mexican Grill have announced plans to add more drive-thru lanes as customers prefer the convenient and more contact-free approach.

McDonald’s speeded up plans to close the restaurants during the pandemic. In a call with investors in July, Chief Financial Officer Kevin Ozan said the fast-food chain would accelerate closures that it expected in future years — including more than 100 Walmart locations with a low volume of business.

Walmart plans to convert former McDonald’s locations into other types of restaurants and services, including some with a more regional feel or unique spin, Walmart spokeswoman Molly Blakeman said. For example, she said, one store has a smoothie vending machine and several others will become ghost kitchens, a central kitchen that cooks for multiple brands or restaurants.

She said it is testing locations with Yum Brand’s Taco Bell and Domino’s Pizza. In other stores, she said the space has become other types of shops that offer a wide range of products, from tool rentals to hair braiding.

This story originally appeared on CNBC.