Krispy Kreme halts doughnut sales partnership with McDonald's

Krispy Kreme Inc. has decided to pause its doughnut partnership with McDonald’s at around 2,400 US locations, as announced during its earnings report on Thursday, May 8, 2025. This partnership, which aimed to sell Krispy Kreme products in all of McDonald’s approximately 13,000 US restaurants by the end of 2026, faced challenges that led to the temporary setback. Initially launched with promising consumer excitement and demand exceeding expectations since its testing phase in Kentucky in 2022, the economic climate has shifted substantially in the last year for both companies. Changes in consumer spending behavior amid economic uncertainty have negatively affected the fast food industry overall. McDonald's has recently reported its worst quarterly performance since the COVID-19 pandemic, suggesting that customers are tightening their budgets. Additionally, Krispy Kreme has experienced a significant decline in its stock value, losing about 65% over the past year. The doughnut chain also declared it will stop paying dividends to shareholders to focus on paying down debt and driving profitable growth. Krispy Kreme’s reassessment of its partnership is strategic, aimed at ensuring a more profitable business model for both brands. The company believes that the hiatus will assist in formulating a pathway to achieve sustainable expansion that benefits Krispy Kreme’s market presence through collaboration with McDonald’s. As the economic outlook continues to evolve, the two chains are focusing on essential actions to adapt to the challenges posed by the fast-food market. Krispy Kreme CEO Josh Charlesworth expressed the need for the brand to enhance its operations to facilitate growth, emphasizing that improvements are necessary to navigate current hurdles effectively. Both Krispy Kreme and McDonald’s are at a pivotal juncture as they navigate unprecedented economic pressures and changing consumer attitudes. For Krispy Kreme, the focus remains on leveraging its partnership in the long term while adapting to the current landscape to ultimately achieve greater profitability. The future of this collaboration depends on market dynamics and the ability of both companies to resonate with their customer bases as they grapples with fluctuating demands.