McDonald's to close 200 US stores, majority of which are inside Walmart locations
Move described as an 'acceleration of closings' that were planned for future years
McDonald's expects to permanently close 200 of its U.S. locations this year, over half of which are located within Walmart stores where sales have fallen.
The move was described as an "acceleration of closings" that were originally planned for future years, according to a regulatory filing. Even after the planned closures, however, the company is projected to see a net gain of 350 stores by years' end, the filing stated.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD'S CORP. | 292.44 | -1.80 | -0.61% |
McDonald's President and CEO Chris Kempczinski said the coronavirus pandemic continues to cause uncertainty and depress consumer sentiment but he believes the April-June period will be the trough in the company's performance.
MCDONALD'S GLOBAL SALES SUFFER AS CORONAVIRUS LOCKDOWNS LIMIT OPERATIONS
Over a three-month period ending June 30, McDonald's company-operated sales and franchised revenues decreased around 30 percent, the company said. During the past six months, revenue was down about 18 percent.
A worker wears a mask and gloves as she hands soft drinks to a customer at a McDonald's drive-thru on April 22, 2020 in Novato, California. (Photo by Justin Sullivan/Getty Images)
The company attributed the decline in sales performance as a result of the COVID-19 pandemic, which limited operations industrywide.
Despite the interruptions created by COVID-19 however, Kempczkinski told investors Tuesday that the company has learned to adjust its operations "to this new environment."
MCDONALD'S TO REQUIRE CORONAVIRUS FACE MASKS IN ALL US RESTAURANTS
"Our strong drive-thru presence and the investments we've made in delivery and digital over the past few years have served us well through these uncertain times," said McDonald's CEO Chief Chris Kempczinski, adding that the company saw "continued improvement in its results throughout the last three months as markets reopened around the world.
Former McDonald's USA CEO Ed Rensi told FOX Business' Stuart Varney that the store closures are nothing to worry about.
"The 200 stores closing, frankly, is not bothersome to me at all because historically McDonald's will always close between 150 to 200 because markets change constantly," Rensi said.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Of the chain's 39,000 restaurants worldwide, 96 percent are now open, compared with 75 percent at the start of April.
However, in the U.S., McDonald’s put on the brakes. After reopening 2,000 dining rooms with reduced seating, the company paused reopenings in early July as coronavirus cases spiked. Last week, McDonald’s said it will delay dining room reopenings for at least another month and will require face masks for anyone entering its restaurants.
The Associated Press contributed to this report.
CLICK HERE TO READ MORE ON FOX BUSINESS