Krispy Kreme test expands to more than 150 McDonald's locations in Kentucky

More than 150 McDonald's locations in Kentucky will begin selling Krispy Kreme doughnuts next month.

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This is an expansion of the fast-food giant's initial test with the sweet treats that was conducted last year. There are nine McDonald's restaurants in Louisville that have begun serving Krispy Kreme doughnuts since October of last year. As part of the larger test, it will be possible to gauge customer demand as well as understand the impact that a larger-scale launch would have on the restaurant's operations.

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McDonald's customers in select locations in Louisville and Lexington will be able to purchase Krispy Kreme's chocolate iced doughnuts with sprinkles and glazed doughnuts filled with chocolate cream starting March 21. Throughout the day, the McDonald's treats will be available in the drive-thru lane, in the restaurant, and through the McDonald's app, and can also be ordered for delivery if you prefer.

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The company has already made some tweaks to the earlier test, which didn't allow customers to order doughnuts for delivery, and offered raspberry-filled doughnuts instead of chocolate cream-filled doughnuts in place of the earlier test. However, the expansion seems to suggest that despite macroeconomic challenges, the initial experiment may have at least been somewhat successful in driving traffic.

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While consumers have been pulling back on spending on restaurants as inflation puts pressure on their budgets, both Krispy Kreme and McDonald's reported strong sales in recent quarters, despite the fact that inflation has been putting pressure on their budgets.

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Because of its cheap deals, McDonald's U.S. traffic increased in the second half of the year, bucking the trend of the industry. As part of its efforts to encourage diners to visit more frequently, the burger chain has also been promoting coffee, which is often served with doughnuts. As a result of the fact that consumers are willing to spend money on affordable treats, such as fresh doughnuts, Krispy Kreme has been able to raise prices without hurting its sales.

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With its "hub and spoke" distribution model, Krispy Kreme can efficiently make and distribute its treats. Production hubs, such as both doughnut factories and stores, are responsible for sending off freshly made doughnuts throughout the day to a wide range of retail stores, such as supermarkets and gas stations, around the country.

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As Josh Charlesworth, Chief Operating Officer of Krispy Kreme, said in January at the ICR Conference, the McDonald's test showed that the doughnut chain was able to execute its daily fresh deliveries to its restaurant locations on a daily basis. As for the progress of the test, the company's executives have refused to share any further details about the test beyond that.