McDonald’s and doughnut maker Krispy Kreme said Tuesday they would end their partnership in the US by July, as the companies struggled to manage the costs associated with the venture.
Under the partnership, announced in March last year, McDonald’s planned to sell Krispy Kreme’s doughnuts as part of its breakfast menu at more than 14,000 stores in the US. But so far, the doughnuts were available at only 2,400 McDonald’s restaurants, according to the companies.
“Ultimately, efforts to bring our costs in line with unit demand were unsuccessful, making the partnership unsustainable for us,” Krispy Kreme CEO Josh Charlesworth said.
As part of the deal, Krispy Kreme had also agreed to not supply its doughnuts to any other quick service restaurant in the US through the end of 2026.
The doughnut chain withdrew its annual forecast in May and said it was reassessing the deployment schedule for the program together with McDonald’s.
Krispy Kreme’s shares, which have lost about 70% of their value this year, were down marginally in choppy trade.
The doughnuts were part of McDonald’s crucial breakfast menu — a feature the restaurant chain has been trying to bolster by adding new items, bringing back crowd favorites and investing in marketing.
McDonald’s said Krispy Kreme was a small, non-material part of its breakfast business, which it referred to as a core pillar of its business strategy.
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