Is McDonald's Walking Out On Wal-Mart?

Retail

Published: September 14, 2007 5:39 am

McDonald’s (MCD) used to be the exclusive fast food supplier in Wal-Mart (WMT) stores. Subway is now taking over a number of those spots. According to The Wall Street Journal, Subway is now in 1,419 Wal-Marts compared with 1,021 McDonald’s.

The Subway people would like the world to believe that Wal-Mart wants the image of selling healthy food, and not hamburgers and French Fries with milkshakes the size of a VW. There may be some truth to that, but there is also some evidence that McDonald’s may not be renewing its leases in Wal-Mart stores and Subway is getting its spots because there is a vacuum

McDonald’s is making a lot of its big money by staying open 24 hours a day and serving breakfast to the world-weary at 5 PM. Drive throughs make up a lot of its business. Wal-Mart locations are ill-suited to these new tactics.

It may be that McDonald’s is just taking its burgers and leaving.

Douglas A. McIntyre

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