- McDonald's will sell Krispy Kreme doughnuts at nine locations in Kentucky, starting Oct. 26, as part of a test.
- Restaurant chains have been experimenting with new menu items and promotions to lure cash-strapped customers back to their locations.
- Krispy Kreme CEO Mike Tattersfield has said customers are willing to splurge on affordable treats like fresh doughnuts.
Starting Oct. 26, the fast-food giant will sell Krispy Kreme doughnuts at nine locations in the Louisville, Kentucky, area as part of a test. McDonald's said the test will help it learn more about how teaming up with Krispy Kreme would affect its operations.
McDonald's customers will be able to order the original glazed, chocolate iced with sprinkles and raspberry filled doughnuts, either individually or in packs of six. Participating McDonald's locations will sell the doughnuts all day, but the treats won't be available for delivery.
Krispy Kreme will deliver fresh doughnuts daily to the McDonald's restaurants, according to McDonald's. The doughnut chain 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.
The test comes as consumers have been cutting back on restaurant visits as soaring inflation pressures budgets. To get customers back into restaurants, chains have been experimenting with new menu items and promotions.
In the first half of the year, McDonald's said that lower-income consumers in the U.S. were spending less at its restaurants. Krispy Kreme CEO Mike Tattersfield, on the other hand, has said his chain has strong pricing power because customers are willing to splurge on affordable treats like fresh doughnuts.
In the second quarter, Krispy Kreme reported 7.5% revenue growth for its U.S. and Canada division. But it trimmed its full-year forecast for earnings and revenue, citing a stronger dollar and weaker performance from U.S. production hubs that don't deliver to other locations.
It's not the first time that fast-food chains have leaned on doughnuts to draw customers. In 2020, KFC launched a "Fried Chicken and Donut" sandwich nationwide after tests of the item grabbed attention on social media.