A Moveable Feast: Restaurant Chains Bid Goodbye to Brick-and-Mortar Retailers

Posted in Takeout on May 11, 2021


As foot traffic trickled away during the pandemic and the restaurant industry pivoted to off-premises channels, major chains lost their appetite for locations inside big-box retail stores.

Case in point: McDonald’s has been steadily scaling back its market presence inside Walmart stores. Last year, at the height of the outbreak, the burger behemoth announced plans to step up the pace of unit closures in Walmart nationally. The bulk of the 200 lower-performing locations slated for shuttering across the U.S. were in Walmart stores.1

At the peak of the partnership with the retail giant, McDonald’s had about 1,000 restaurants in Walmart stores—a number that decreased at a gradual rate over the years, until COVID-19 made business there especially challenging. “During the pandemic, fewer shoppers wanted to linger in a Walmart and instead just sought to get their shopping done quickly, while using Walmart’s curbside delivery or in-store pickup of online orders to a greater degree, leading to soft business,” Fortune reported.2

As McDonald’s CFO Kevin Ozan explained when announcing the closures: “The U.S. is accelerating some restaurant closures previously planned for future years. Of the 200 U.S. closures for this year, over half are low-volume restaurants in Walmart store locations.”1 The pandemic escalated the urgency of the burger chain’s strategy of shifting away from mall and retail store locations to drive-thru-friendly units.1

Ramping up that shift paid off. According to Ozan, “The number of drive-thrus impacts the market’s pace of recovery. Markets with a higher percentage of drive-thrus are showing quicker recovery. Markets with a higher concentration of city center and mall restaurants are seeing a heavier impact from reduced foot traffic."1

Pickup Perks Up Sales at Starbucks and Dunkin’

The same strategy was brewing at Starbucks, which announced last May that it would close mall-based locations as part of its migration to suburban areas with drive-thrus. “Our digital leadership and ability to transform lower-performing locations and formats to successful new store formats (i.e., relocate Starbucks stores from low-traffic malls to new, thriving locations that combine the third place with drive-thrus) are unique strengths we will lean into in the coming months,” Starbucks CEO Kevin Johnson explained.3

The coffee chain's strategy included introducing mobile order stores devoted to takeout, like the Penn Plaza location it opened in New York City in 2019. Even before the pandemic, takeout accounted for 80% of Starbucks orders; streamlining the service became an even higher priority once it began.3

Other chains have moved quickly from retail-based to stand-alone operations. Last February, Dunkin’ closed 450 locations in Speedway gas station convenience stores and opted for stand-alone locations where it could offer its full menu of food and beverage items.4

Prior to the pandemic, retail stores were falling out of favor with restaurant chains due to lower volume and profitability, greater restrictions, and competition from other food and beverage brands offered at the same locations. COVID-19 propelled the trend forward as a particularly pressing strategic necessity. 

Now that consumers have become accustomed to the ease and convenience of digital ordering and off-premises models, takeout and delivery sales will likely remain robust post-pandemic, even as in-store traffic trickles back.

Mondelēz International Foodservice offers a unique combination of culinary innovation and trusted brand ingredients to optimize menus for the ever-changing foodservice landscape. Want travel-friendly concepts that can also help drive traffic back for dine-in service? Reach out below to learn how we can make it happen for your foodservice operation.

1 Maze, Jonathan, “McDonald’s Is Closing Another 200 U.S. Locations,” Restaurant Business, July 28, 2020

2 Wahba, Phil, “McDonald’s to exit hundreds more Walmart stores,” Fortune, April 9, 2021

3 Maze, Jonathan, “Starbucks Wants Fewer Mall Locations and More Drive-Thrus,” Restaurant Business, May 21, 2020

4 Maze, Jonathan, “Restaurant Companies Move Out of Their Retail Homes,” Restaurant Business, April 9, 2021



Topics in this article

Related Articles

Right Bites: Restaurants Rework Menus for Snack-Happy Market

As small bites replace large meals, restaurant operations adjust menus for all-day snacking. Explore key data behind the latest trends in small plates.

Oh Dough They Didn't! Upstart Pizza Chains Cook Up New Recipes for Success

As a versatile staple, pizza continues to power sales. Lean how fast-casual restaurant chains Pie Five and 7Pie are taking pizza innovation to new levels.

Next Course: 2023 Foodservice Tech Trends

Explore why two foodservice trends--off-premise restaurant formats and artificial intelligence systems--are poised to rise to new heights in 2023.

Hot Sellers: Summer Flavor Forecast Calls for Wave of Appetite-Whetting Trends

Summer sizzles with seasonal staples and trending twists on old favorites. Explore flavor forecasts from Datassential and EatingWell for summer menu ideas.

All About Newstalgia in Desserts

Tweaking familiar dishes to include a new flavor or format could be the menu addition that will pique consumer interest and help increase sales.

No Sustain, No Gain: Foodservice Feeds Bottom Line with Sustainability and Wellness

Sustainability has become a core catalyst for foodservice success. Explore how True Food Kitchen and Mondelēz International exemplify the sustainability trend.

Smaller, Faster, Smarter: Automated Restaurant Formats Feed the Future of Foodservice

Sweetgreen, Chili's and Panera are adopting lean, automated restaurant formats. Learn how automation is transforming the restaurant industry.

Beverages and Desserts Fuel Flavor Inspiration

Inspired by classic beverage elements, operators are creating new dessert menu items — as well as drinks that feature dessert flavors.

Metaverse Measures Up, Major Restaurant Brands Dig In

Top restaurant chains are hungry to tap the promotional potential of the metaverse. Explore Jimmy John's and Pizza Hut's ambitious metaverse initiatives.

Va-Va-Vending: Technology Transforms Vending Machines into 24/7 Restaurants

No longer just a source for prepackaged snacks, vending machines are now purveyors of gourmet-quality meals. Explore two revolutionary vending machines.

Join the Let’s Chat Snacks Community

Be the first to know when we drop new articles, trends and insights, with updates delivered directly to your inbox. Plus, you’ll get an insider perspective on all things foodservice, carefully curated to help you grow your business.