McDonald's Not Lovin' Walmart Locations

Some Walmart shoppers are gong to lose (fast) food options thanks in part to the pandemic.

McDonald’s said this week that it could close about 200 of its stores — half of which are located in Walmart stores.

That hardly represents any sort of commerce tragedy, as the U.S. contains about 14,000 McDonald’s restaurants, and neither chain will likely feel any meaningful pain from these closings. But the move does stand as a demonstration that not all marriages of famous retail brands last forever.

In fact, Kevin Ozan, the chief financial officer for McDonald’s, described the restaurants slated to close as “low volume” locations during Tuesday’s post-earnings conference call with investors. He added that the move has been in the works for a while but suggested that the pandemic accelerated those plans.

Overall, the number of McDonald’s stores has been declining since hitting a peak in 2014 as the company lost patience with locations suffering from weak sales and low customer counts. As well, the company has recently favored restaurants with drive-thru windows — which the Walmart locations obviously lacked — a preference that no doubt has been fueled by the pandemic.

The partnership with Walmart dates back some 30 years and has involved at least 700 stores. Locating McDonald’s inside Walmart stores was part of broader trend that put together fast food operations with big-box retailers, providing easy, affordable fuel to shoppers.

These days, it seems, the focus is shifting from fast food to healthcare services when it comes to adding value to the big-box retail shopping experience — or simply offering consumers more health care options as a way to broaden the appeal of the overall retail ecosystem.

That certainly applies to Walmart.

Just after revealing plans to bring its Health Center concept to Florida next year, starting with the Jacksonville area, Walmart in late July confirmed that it will open at least six centers in the greater Atlanta area by the end of 2020, according to a published report.

Located next to Walmart stores and ranging in size from 5,200 square feet to 8,800 square feet, the centers offer a range of medical services at low, transparent prices, regardless of patients’ insurance status. Walmart has been tinkering with the concept at its various locations in terms of layout and services offered. As CNBC pointed out, many of the company’s 4,700-plus stores across the country are in small towns or rural areas with few health care services and medical professionals, making any centers that open in those locations potential lifelines for their communities.

Bentonville, Ark.-based Walmart operates more than 11,300 stores under 58 banners in 27 countries, and e-commerce websites, employing 2.2 million-plus associates worldwide. Walmart U.S. is No. 1 on The PG 100, Progressive Grocer's list of the top food retailers in North America, while Walmart-owned Sam's Club ranks No. 9 on the list.