n this photo illustration, a Krispy Kreme glazed doughnut is shown on May 12, 2022 in Daly City, California. Krispy Kreme reported strong first quarter earnings with net income of $4 million compared with a loss of $3.06 million one year ago. (Photo Illustration by Justin Sullivan/Getty Images)
Starting March 21, McDonald's will expand its partnership with Krispy Kreme to approximately 160 locations across Louisville, Lexington, and the surrounding area.
The initiative was first launched in October at nine locations in Kentucky.
This expanded market test is designed to test customer demand for the popular sweet treats, which now includes three varieties: Krispy Kreme's Original Glazed Doughnut, Chocolate Iced with Sprinkles Doughnut, and the Raspberry Filled Doughnut.
"McDonald’s is always looking for ways to give our fans more of what they crave, and we often conduct tests to inform future menu decisions," the company said in a press release. "This small-scale test will help us understand how offering new bakery items like Krispy Kreme could impact operations in our restaurants."
McDonald's has so far benefited from customers trading down due to inflation. The company recently beat Wall Street estimates for its quarterly earnings and revenue, in large part because it was able to raise prices without scaring off customers.
Krispy Kreme, likewise, has reported strong earnings on the back of price hikes. It is also increasingly relying on distribution partnerships to reach customers such as through Walgreens, Acme, and ShopRite.
If the partnership with McDonald's continues to grow, it could become a major source of revenue for the growing doughnut business.
American businesses that rely on Chinese goods are reacting with muted relief after the U.S. and China agreed to pause their exorbitant tariffs on each other’s products for 90 days. Many companies delayed or canceled orders after President Donald Trump last month put a 145% tariff on items made in China. Importers still face relatively high tariffs, however, as well as uncertainty over what will happen in the coming weeks and months. The temporary truce was announced as retailers and their suppliers are looking to finalize their plans and orders for the holiday shopping season. They’re concerned a mad scramble to get goods onto ships will lead to bottlenecks and increased shipping costs.
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