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McDonald’s Corp. (MCD) plans to upgrade hundreds of its restaurants inside Wal-Mart Stores Inc. (WMT) locations to boost sales and profits for a group of stores that lag the larger fleet.
McDonald’s proposal would add fruit smoothies and frappes–an icy, coffee drink–to these stores, but not the broader line of McCafe drinks introduced last year. McDonald’s found the pricier espresso drinks didn’t do well enough in tests at 50 Wal-Mart-based restaurants to justify their addition, according to minutes of last month’s meeting of McDonald’s National Leadership Council, a franchisee group.
McDonald’s also plans to update technology at these stores, with the goal of helping profitability by processing orders faster.
The payoff for McDonald’s would be lifting a large group of its 14,000 U.S. restaurants that have missed out on some recent growth initiatives like beverages. McDonald’s has 939 Wal-Mart-based stores, 65 owned by the company, the rest by franchisees.
